Dodd-Frank is devastating the Congo right now.

The collateral damage is unacceptable.

We have a social enterprise in the DR Congo to end systemic poverty. The opportunities to solve it are at our fingertips. Global Witness and Enough Project, human rights advocacy groups who should be aligned with us, are doing everything they can to stop us.

UPDATE: I originally wrote this in August and updated it in November. Just this week a UN Panel of Experts report came out that verifies the depth of the problem Dodd-Frank is causing for the Congolese people. So far Dodd-Frank has not even been implemented and the result has already been devastating.

We need to continue to put the pressure on groups like Enough Project, Global Witness and the SEC to admit how destructive Dodd-Frank is in the Congo. We need them to stop supporting what everyone else has deemed an abject failure and get behind repealing that 1502 clause in Dodd-Frank that has been so injurious.

See the summary of the UN Panel of Experts report here , then read how you can help change this below. Original post follows:

DR Congo is the 12th largest country on earth with the 8th most mineral wealth in the ground. With 70 million people as a workforce and all this latent wealth, it could easily be a first world leader in a very short time.

My Congolese partner – a Congolese Chief, and I have committed to create infrastructure and sustainable economies in the Congo by exporting agriculture and minerals, and leaving a significant portion of the profits local, something no other company has ever done. We will also fund and train local business owners to learn how to run businesses. The net effect – we believe we can solve systemic poverty in the DR Congo in 5-10 years.

The Problem – Dodd-Frank
But now an obscure provision pushed forward by Global Witness and Enough Project and tucked into the Dodd-Frank Act (Provision 1502) could be jeopardizing much of this, and is already hurting millions of Congolese and putting thousands in immediate danger of their lives.

The provision requires tens of thousands of companies to disclose if their products use minerals from the Congo, and to prove they did not come from criminal militias. As a result of the unintended stigma this has created, the mineral trade for all of central Africa has evaporated, creating a devastating de facto embargo of the entire region.

We have been trying for months to find buyers for the minerals these Congolese tribes own and have talked to every legitimate smelter and buyer in the world. None are buying Enough Project and Global Witness continue to claim there is no embargo, but we have asked them a dozen times to give us the name of a single buyer of artisanal minerals in central Africa – they can’t.

The Negative Effect
If all Congo minerals came from criminals, then Dodd-Frank would make sense. But the fact is that a tiny percentage of Congolese minerals come from criminals in the comparatively small conflict area. The rest are from honest, hard-working chiefs and their tribes throughout the vast Congo, millions of whom, with no connection to the conflict area, have lost their income and have moved from poverty to destitution.

Only the Criminals are Benefiting
COCABI, COMIMPA and COMIDER represent 20,000 miners in the conflict area. The wrote a letter to the SEC imploring them to not listen to Global Witness or Enough Project who have never even consulted with those most affected by Dodd-Frank, the miners.

While all the NGOs and politicians are quoting each other’s support of this, we are quoting chiefs and tribes who are actually being affected by it, all of whom say Obama’s Law (that’s what they call it) has been disastrous for them and their livelihood. Doesn’t this say something very powerful to us?

The Nuclear Option is Not Acceptable
The World Bank says 10 million people in the Congo get their living from mining, most whom are in regions never connected with conflict. And even in the conflict region there are 100,000 honest miners who have been moved from poverty to destitution by Dodd-Frank.

Dodd-Frank creates the equivalent of a nuclear option because it is not targeted specifically at the militia, but at minerals.

Demonize Criminals, Not Minerals
This approach is no different than burning down every house in town to stop a burglar from stealing. Dodd-Frank has burned down the entire mining industry in central Africa in hopes that their scorched earth policy will catch a militia group or two in its path. They are willing to take down every innocent man, woman, and child who live off mining. Such massive collateral damage is not acceptable under any circumstance.

One woman said, “I used to tend my fields, but women who farm get raped regularly by the militia. My only safe job is in the mines. I don’t know what I will do now.”

The solution is simple. In an appalling show of weakness, the UN (MONUSCO) has been sitting around in the Congo “observing” the atrocities for 15 years. They need to grow a spine. The militias are small, rag-tag, poorly organized, poorly led thugs with no significant weaponry. They could be over run in a few days of concerted effort.

If there is no militia, there would be no need to demonize minerals. But if you demonize minerals, the militia will still be there terrorizing, raping and killing.

Global Witness and The Enough Project Are NOT Advocating for the Congolese
These two NGOs are directly and personally responsible for getting politicians to insert the disastrous 1502 provision into Dodd-Frank. It was well intentioned – they did not want it to have the effect it’s having. But now that they are fully vested in the political side of this provision, they have completely lost their way regarding the Congolese themselves.

They steadfastly refuse to even admit it has had a negative effect, regularly deny the de facto embargo in the face of every statistic and my personal experience, brazenly try to deflect by blaming the opposition for the embargo they deny exists, and worst of all, have now taken to recommending that the Chiefs sell their minerals to human rights violators.

The NGOs Solution? – Sell to human rights violators and smugglers
In a conference call with Enough Project’s main leadership, I was astonished to hear them recommend that we sell to the Chinese, who have one of the worst human rights records on earth and who have no regard for the human rights of the Congolese. A stunning position for a supposed human rights advocacy group.

Global Witness has also lost its way. In a response to the swell of opposition to Dodd-Frank by those supporting the Congolese people, Global also stunned the advocacy world, supporting Dodd-Frank by pointing to the smuggling of the militia as a good thing, “High levels of smuggling…reflect the reality that mining is continuing” and is “in fact substantially higher because of increased smuggling”. Truly amazing.

This is incredible. Global wants to stop the militias and yet points to the smuggling of minerals, a common militia tactic, as proof that things aren’t as bad in the conflict area as everyone says. Read the Forbes article and my response to it in the Comments section .

Clearly these two NGOs are no longer advocating for the Congolese miners, but for their own reputations which are now fully vested in arranging the deck chairs on the Titanic as Dodd-Frank sinks the Congolese economy.

They are also both in direct violation of the OECD Guidelines because they have done no due diligence among the miners who are most affected by the colonialistic decisions they want to impose from the outside. The hypocrisy is beyond the pale.

Advocating for What or Whom?
As Eric Kajemba, the leader of a Congolese civil-society group has said, “If the advocacy groups aren’t speaking for the people of eastern Congo, who are they speaking for?”

We’re advocating for the millions of Congolese miners and their families. Global and Enough stopped doing that a long time ago. They are so vested in their Dodd-Frank solution that to admit they were wrong now would create serious questions about their expertise in such situations. Too late – it already has. The best thing they could do is re-join us in advocating for the Congolese miners and stop pushing forth a political position that creates donors for them while Congolese people starve.

Please write or text them and challenge them to replace their political agenda with advocacy for the Congolese people:

Global Witness
Annie Dunnebacke
Oliver Courtney
Sophia Pickles
Phone: (202) 621-6665

Enough Project
Sasha Lezhnev
Jonathan Hutson
Fidel Bafilemba
Phone: (857) 919-5130

Contact Your Politician
Contact your local politician and also the following major supporters of this disastrous 1502 provision:

Senator Barbara Boxer
(510) 286-8537 (202)

Senator Chris Coons
Phone: 302-322-1140

Senator Dick Durbin
(202) 224-2152 – phone
(202) 228-0400 – fax

Use Social Media to Get This Changed
Please use your social media network to get this changed – post the above on Facebook, LinkedIn, and others. Link to it from Twitter and push people to it via email.

10 Million people are negatively affected, hundreds of thousands have lost their subsistence living, and thousands are in immediate jeopardy of their lives – all because of Provision 1502. Please help us correct it immediately. Universal collateral damage to the innocent is simply not acceptable under any circumstance.

Thanks for whatever you can do!

Why I’m going to the Congo on Wednesday.

Live well by doing good.

Four and half years ago we started The Crankset Group and 3to5 Clubs to help business owners get to their Ideal Lifestyle, and to fulfill my vision of focusing on solutions to poverty. On the latter, we’re taking a radically different approach.

Non-profits vs. Capitalism
500 million people (1 2/3 U.S’s) have come out of poverty in JUST 20 YEARS in China and India alone. And it wasn’t the result of non-profits or other traditional means. It was achieved through [ugly, evil, horrible, by some accounts] capitalism, which has been exponentially more effective in attacking poverty in those countries than any other methods.

In the last 100+ years of well-meaning non-profit intervention in Africa – a few trillion dollars and tens of thousands of incredibly dedicated lives later – the rosiest of studies says the long-term impact on economic growth is not “tranformative” and “peters out” (The Effects of Foreign Aid in Sub-Saharan Africa, Aug 4, 2010). Some research says Africa is actually worse off economically then it was 100 years ago.

Using Business to Effect Change
The Democratic Republic of the Congo is the second poorest country on earth . We’ve been asked by business leaders and the government to come get involved. I’m doing it by getting personally involved, long-term, with national as well as local business leaders and government there, and starting a company in the Congo with an investment where I will purposely take a minority position to native Congolese.

We intend to effect permanent change by rebuilding the economy with the revenues from the business, and by working to build and rebuild many businesses around that one by the velocity of the dollar (capitalism). This is when the same dollar moves through multiple businesses in a local area and creates wealth multiple times for many people. We’re looking forward to using it to kick start local economies in the DR Congo.

It’s Time to Give Local Capitalism a Try
Some people and some non-profits have a negative view of capitalism because of the high visibility of giant corporations making bad macro decisions for micro (local) problems – see my blog on The Problem of Big . But capitalism at the local level is a very positive, stabilizing, long-term solution, as demonstrated by the incredible successes in China and India.

One of the big issues in the DR Congo has been giant corporations coming in, pulling out resources and money for a few years or more, then leaving. Because there was no local or national ownership, the net effect was never sustainable. We intend to create local ownership, keep a significant portion of profits local, and see the Congo transformed one business/locality at a time.

I could have given this money to any number of charities that do incredible work to solve short-term problems (hunger, disaster, health, etc.). And we’ve been offered thousands of dollars by non-profits to fund the large potable water project and the clinic we’re putting in before we do any business. We’ve also been offered millions in loans by the U.S. government to accelerate the start up process exponentially.

But in both cases my Congolese friend and I believe these improvements should come from the profits (and in this case the initial investment) of the company. It will provide a “no strings attached” approach, but more importantly it will show people the direct benefit of having capitalism and our company working in their area.

Giving Money or Building a Business Are Both Risks
As with any investment, there are risks, and with this kind of investment, the risks are much higher than normal. However, this isn’t a typical investment in a company, but the decision to focus on capitalism instead of charities to build a different future for the DR Congo. If we were giving these funds to a charity, I would expect no return. If our company grows and prospers we will be able to give this money (in the form of starting other locally owned companies) many, many times over.

Intending to Succeed
My Congolese friend and I intend to change the Congo. He said, “I want you to see the Congo today because I want to stand with you on the edge of Kinshasa 10 years from now and say, “See what we have done!””.

If we succeed we’ll see a very different Congo down the road. If we don’t, we’ll call it practice and go back to the drawing board to see what else we can try. Either way, we will Live Well by Doing Good.

We intend to succeed.