Fake Money, Bougainville Politics and International Scammers JOHN COX IN BRIEF 2014/7 On Saturday 16 February 2014, Barry Webb, an and religious leaders. These payments to high- American citizen, was detained as he entered Port profile people provided ‘evidence’ that the scams Moresby from the Philippines. He was travelling ‘really worked’ and were effective at drawing in to Bougainville to deliver a briefcase full of newly thousands of ordinary investors, who never saw minted ‘Bougainville kina’ or ‘BVK’. This pseudo- their money again. As with Ponzi scams elsewhere, currency is not legal tender in Bougainville (or the Papua New Guinea fast money schemes used anywhere else). Rather, the Bougainville kina is the existing social networks. In the case of U-Vistract, creation of the U-Vistract scam, an elaborate Ponzi this included the Bougainvillean community, scheme (Cox 2013). When questioned by Papua particularly educated Bougainvilleans living in Port New Guinea authorities, Webb claimed to represent Moresby, as well as churches, especially the large the ‘International Organisation for Economic urban Pentecostal churches (Cox 2013). Development’ (‘IOED’), a fictitious organisation U-Vistract was declared bankrupt in 2000 and with a name clearly intended to recall the OECD a warrant for Musingku’s arrest is still current. (Organisation for Economic Co-operation and However, while the scam has not made any Development). Webb produced a letter from the payments to investors since the heady days of founder of U-Vistract, Noah Musingku, who now 1999, its leaders have managed to evade capture represents himself as ‘King David Pei II’ of the by shifting jurisdiction. In 2003, Musingku fled to ‘Royal Kingdom of Papala’, a pseudo-state based in Solomon Islands and tried to swindle money from south Bougainville. According to the letter, Webb the national government there under the guise of had been appointed as the Kingdom of Papala’s the ‘Royal Assembly of Nations and Kingdoms’, ‘Minister for International Monetary Relations’ a fictional alternative to the United Nations. (Post-Courier 2014). This deal fell through and in 2003 Musingku These events might be simply dismissed returned to Bougainville, where he worked with as another weird ‘cargo cult’ story to come the separatist leader Francis Ona. His influence out of Papua New Guinea. However, they on Ona led to their joint coronation as Kings have a much broader political significance for of the Twin Kingdoms of Me’ekamui (Ona) and Bougainvilleans and for Papua New Guinea as Papala (Musingku). Before Ona died in 2005 he a nation. I have written elsewhere (Cox 2013) had become disillusioned with Musingku and the about why Musingku’s pseudo-state might make relationship dissolved. Without Ona’s protection, sense to Papua New Guineans disillusioned with Musingku feared for his life and recruited a number the progress of development and looking for a of Fijian mercenaries to train his own militia Christian alternative to a national government they (Regan 2010). perceive as hopelessly corrupt. In this In Brief, I Musingku survived an attack on his camp will sketch out some of the background to the story in 2006 and remains a destabilising influence in of the briefcase full of fake money and analyse Bougainville. It seems that his best chance of being the implications of the persistence of Musingku’s pardoned is to make himself into a player within scam for Bougainville politics and the possible the ongoing Bougainville peace process. To date involvement of international money-laundering this has involved being a constant ‘spoiler’ of the networks. Autonomous Bougainville Government’s efforts U-Vistract was the largest of several ‘fast money to bring services into Siwai District (Regan 2010). schemes’ that gripped the imagination of Port Musingku’s brother has been recently reported as Moresby in 1999. These Ponzi scams promised participating in local reconciliation activities in 100 per cent monthly returns and paid early Siwai (Masiu 2014). investors, who were often prominent members Musingku launched the Bougainville kina of the community, including business, political in 2009, drawing international media attention State, Society & Governance in Melanesia ips.cap.anu.edu.au/ssgm IN BRIEF 2014/7 • as it was rumoured that the BVK50 note was and the Bougainville kina are backed by gold imprinted with the image of Christ. U-Vistract resources. Musingku has been involved in conflicts has continued to promote the Bougainville kina, over small-scale gold mining between local armed prompting the Bank of Papua New Guinea to warn groups (Regan 2010). in December 2013 that the ‘currency’ was illegal. There are other local impacts of the Bougainville The Autonomous Bougainville Government has kina scam. U-Vistract agents are taking ‘deposits’ denounced Musingku on many occasions and of Papua New Guinea kina and giving Bougainville recently reaffirmed that the Papua New Guinea kina in exchange as if it were legal tender. This is kina was the only valid currency in Bougainville. already having an impact on small businesses in Webb’s arrest in Port Moresby raises the south Bougainville (Toreas 2014). question of what international connections the Musingku’s operations are more serious than U-Vistract scam might have. Webb appears to have they may at first appear and should not be dismissed a criminal record in the United States and is closely as an out-of-the-way ‘cargo cult’. Musingku is an associated with the shady Frank Mezias, who has active threat to political stability in Bougainville, attempted to defraud Native Americans while particularly in the south. U-Vistract’s networks posing as a representative of UNESCO. Mezias extend across the whole island and are still active apparently runs the ‘International Organisation for around the rest of Papua New Guinea, illegally Economic Development’ website and a number of taking deposits from people and undermining other fake companies. the nation’s financial systems. The arrest of Barry Van Fossen (2002) has described a similar Webb in Port Moresby indicates that Musingku is scam network, based around a pseudo-state, the also connected to international criminal networks ‘Kingdom of Melchizedek’. This elaborate scam that we currently know very little about. These was run by the convicted swindler Mark Pedley. networks may also be operating in other Pacific Pedley targeted separatist groups in the Pacific and countries. Tracing these connections and bringing used their aspirations for sovereignty to reinforce global fraudsters to justice is an ongoing challenge Melchizedek’s claims. Pedley invented more than for law enforcement agencies in Papua New Guinea, 300 fake banks, with names that recall the World Australia and beyond. Bank and other international lenders. In 2000, Author Notes he entered Fiji on a Kingdom of Melchizedek John Cox is a research fellow with SSGM. His doctoral ‘diplomatic passport’. Melchizedek offers close research explored the involvement of middle-class Papua parallels to Mezias and his associate Webb, not to New Guineans in ‘fast money schemes’. mention the home-grown Bougainvillean conman Musingku. References Several dubious foreigners have visited Cox, J. 2013. The Magic of Money and the Magic of the State: Fast Money Schemes in Papua New Guinea. U-Vistract’s Bougainville headquarters. They Oceania 83(3):175–91. usually appear in U-Vistract propaganda with Masiu, R. 2014. Siwai Chiefs Begin Peace Process. Post- royal titles or other official-sounding terms, such Courier 5/3/2014, p. 22. as ‘governor’. Barry Webb seems to be the latest Post-Courier 2014. American National Held with of these. These foreigners may represent broader 1.6 Million in ‘Illegal’ Currency. Post-Courier international criminal networks that have used 17/2/2014, p. 1. U-Vistract to defraud people in the United States Regan, A.J. 2010. Light Intervention: Lessons from and possibly other countries. Bougainville. Washington: United States Institute of It is likely that these international connections Peace Press. are interested in the gold produced by small-scale Toreas, W. 2014. Police Chief Tells Musingku Not to miners in south Bougainville. Musingku certainly Mislead Public. Post-Courier 5/3/2014, p. 13. buys and sells this gold, which may give some Van Fossen, A. 2002. Financial Frauds and Pseudo-States plausibility, at least among some Bougainvilleans, in the Pacific Islands. Crime, Law and Social Change to his claims that the ‘U-Vistract monetary system’ 37:357–78. The State, Society & Governance in Melanesia Program (SSGM) E [email protected] @anussgm in the ANU College of Asia & the Pacific is a recognised leading ips.cap.anu.edu.au/ssgm centre for multidisciplinary research on contemporary Melanesia, We acknowledge the Australian Government’s Timor-Leste and the wider Pacific. support for the production of In Brief. The2 views in this paper are those of the author/s State, and Society do not necessarily & Governance reflect those of the State,ANU or the Society Australian & Government.Governancein inMelanesia Melanesia.