The Shackling Effects of Bureaucratic Corruption, And New Tools to Recover National Assets
To argue that misappropriation of social resources is the norm in both developed and emerging economies is to state the obvious. And to argue that economic development inevitably takes hold in spite of resource mismanagement by public officials is historically accurate but discounts the fact that such development would have been achieved much sooner would not be so obvious. Advanced Western societies are replete with the latter observation. The long-held view that all manners of bureaucratic corruption are detrimental to efficient resource allocation is factually incorrect, for in instances where bribery of officials would eliminate burdensome bureaucratic red tapes and facilitate productivity have been put in evidence in emerging economies of Africa and Asia, and one would be hard pressed to condemn such practice on grounds of economic efficiency (the moral implications notwithstanding). Thus a distinction must be drawn between petty corruption that are benign and perhaps beneficial to economic growth, and grand corruption that involves massive looting of the public treasury. In the later, its distortionary effects come from internal misalignment of personal and social interests if the misappropriated funds are expended domestically (this is less harmful); the most serious and damaging effects arise if looted funds are stashed abroad thus depriving the domestic economy of both direct benefits and subsequent externalities. The pervasive presence of grand corruption in Africa remains a major source of concern, for it deprives, and marginalizes national economies to the point where its citizens are kept in near perpetual state of poverty, high crime rates, social instability, and dysfunctional institutions; other consequences on this standard list of the nasty side effects of bureaucratic corruption are just as troubling.
How to contain grand corruption, and return ill-gotten gains to the countries of origin have been the focus of numerous international bodies, and Western governments that see their aid packages to Africa returned to them as fruits of bureaucratic corruption. In the following article entitled “What’s Yours Is Mine,” Andrew Marshall provides guidance on how to minimize bureaucratic corruption, and recover misappropriated national assets.
This study is about recovering money stolen by corrupt politicians and officials. Asset recovery is a key element in deterring and punishing the corrupt, and the reduction of corruption is critical to development. The money can be put to better uses once recovered, and it amounts to billions. But there’s another reason why this is significant for those who are primarily focused on development: amongst the key issues in asset recovery are greater accountability and transparency, which are also increasingly regarded as key to long-term development success. The main argument of this study is that corruption investigations and asset recovery are being tackled in new ways by new actors from the private sector, civil society and media, and that this can help improve the prospects for justice. It would be too much to call this a revolution: it’s an evolutionary process. It needs long-term support if it is to prosper as a policy choice, and it raises some issues for policymakers and those who carry out the recoveries. But if the agenda for accountability is to advance at the same pace as transparency, the prosecution of the corrupt and the return of the money they stole are critical.
The main recommendations of this study for policy makers are:
The U.S. and U.K. Governments should build support for asset recovery at home, and find allies in emerging financial and political powers abroad: financial integrity and transparency need a broader underpinning.
Build on new approaches to recovering stolen loot: Donors should explore new ways of helping start, fund and staff asset recoveries, using capabilities from other governments or the private sector. The U.S. Department of Justice should explore new targets for its Kleptocracy Initiative. Media, civil society, NGOs and victim groups have new roles to play.
Fix the problems with global financial intelligence: It is too easy for corrupt politicians to hide money, and too hard for investigators to find it. The U.S. and U.K. need to fix the due diligence process, and work with banks and others to make the global financial information system function better.
Get tougher with corrupt politicians and countries that won’t co-operate: Pursuing corrupt politicians is important. Refusing visas to the corrupt and their enablers should be encouraged – and publicized. Development and policy officials need to get more comfortable with punishment and recovery.
Build greater global support for recovering the proceeds of corruption:
A lot of excellent policy work has already been done in this area. Notably, the World Bank and the United Nations Office on Drugs and Crime have an initiative called Stolen Assets Recovery Initiative (StAR1). This study quotes from its work: StAR’s work has been groundbreaking. It also relies on the work of three NGOs: Transparency International, Global Witness and the International Center for Asset Recovery at the Basel Institute on Governance. Individual countries have also come up with new strategies, with the U.S. in particular playing a leading role. The UK, too, has developed new thinking, as has Switzerland – both states where stolen assets have been laundered and hidden.
What new can be said? Previous analyses have primarily focused on one critical actor – government – and one critical area – rules and laws. The author’s background is in media, and in an investigative company. Because of my experience, I want to focus on:
- The emerging global information system around banks, financial institutions and intermediaries, and the risk, compliance and investigations industry
- Media, and their role in identifying and punishing corruption.
- NGOs, and their prospects for a more prominent role. The first section looks at the rationale and role of asset recovery: why it has become a significant issue.
The core argument that has been made in the last twenty years is about the importance of the legal and procedural issues that have bedeviled the best known cases (the Duvaliers, for example) and the second section of the study deals with these. But there are other areas that are increasingly receiving attention. Another central issue is the investigative process: following the money. While it is too much to expect to remove the obstacles that exist to financial investigation, it is possible to apply existing rules better, and to develop new approaches. The third section looks at this.
Most studies indicate that there is nothing that can be done without political commitment to prosecute, investigate, seize and return money. Leadership does not come from politicians only: civil society and the media play significant roles, and external attitudes are pivotal. The fourth section deals with these.
The fifth section wraps up the discussion with some conclusions and recommendations. What can be observed about progress in developing asset recovery, and what can be said about future steps? A key theme is that asset recovery needs to move out of the shadows, with investigators and prosecutors making new alliances, and development and policy professionals accepting the importance of the recovery agenda, enforcement and the accountability it involves. The recovery of assets, and investigations– in the media or public sector – deserve more attention and more funding.
The results of co-operation in asset recovery can be impressive. Failure can be profoundly morale-sapping. Michela Wrong’s excellent book “It’s Our Turn To Eat” documents the failure of John Githongo, Kenya’s anti-corruption campaigner – despite his strenuous efforts, and the danger he placed himself in. Her book isn’t especially optimistic about tackling corruption; but it is clear-sighted about the reasons for pursuing it. Some of the author’s thoughts on the subject came from being involved, peripherally, with the aftermath of Githongo’s campaign. Enormous progress has been made in finding the guilty, prosecuting them, and getting back the money they have stolen. At its root this is because of wide-ranging changes in how the world sees accountability and transparency: for that to continue will require effort and imagination. The broader theme of this paper is advancing that agenda, in the longer term.
Why stolen asset recovery matters
More than two years later, officials from the different countries are still fighting to get back money stolen by these officials and their friends and families. A house in London; executive jets; stakes in leading Italian companies have all been the subject of litigation. The good news is that the efforts got started promptly with some signal successes. This is by now a process that banks and governments understand well. Action Plan on Asset Recovery showed real commitment, marked by the Arab Forum on Asset Recovery held in Doha. The bad news: remarkably little has yet been settled, despite the time and effort and money involved. There are recriminations and accusations between the countries that have lost money and those where it may have ended up, and a lot of frustration.
Why corruption became a “problem”
It was only in the late twentieth century that corruption abroad, rather than at home, became an issue. The U.S. first made international corruption into a political issue in the 1970s, with the Foreign Corrupt Practices Act, a landmark piece of legislation. Other countries took decades to follow (in some cases, they still haven’t) with legislation outlawing bribery abroad. Pressure from U.S. companies concerned that they alone would be penalized for bribery has helped to propel the agenda. But wider shifts helped.
One key is the end of the Cold War. Dictators who had hitherto been regarded as “regional strongmen” rapidly became regarded as what they were: simply corrupt dictators. At the same time, the rapid spread of capitalism created new opportunities for corruption, and new concerns about it. NGOs, especially Transparency International which was founded in 1993 by a former World Bank official, made exposing and punishing corruption their cause. There was a normative shift in the 1990s: corruption was not an inevitable evil, like bad weather. It was something to outlaw and punish. This took international legal form – “The (Deauville Partnership with Arab Countries in Transition — Action Plan on Asset Recovery, 2012); (UNCAC Coalition, 2011).
On the 17 December 2010, a Tunisian street vendor called Mohammed Bouazizi set himself on fire, precipitating demonstrations that would spread across the Middle East. Within days, President Zine El Abidine Ben Ali was removed from power. Within weeks, Egyptian President Hosni Mubarak would follow, and within months, Libyan President Muammar Gadaffi.
The G8 put asset recovery as one of the main goals of transition, and its codification into 2012’s “Beyond shedding light on the devastating impact of grand corruption, the Arab spring has revealed major anti-money laundering deficiencies, and the huge difficulties of getting the money back even after the dictator has been pushed from power,” said one group of NGOs working on the issue.
A 1997 OECD Convention marked the beginning of an international movement based on the premise that we all have a stake in the integrity of the global marketplace that deserves the protection of law,” writes one academic.
An agenda, policy recommendations, and action have followed, including the landmark United Nations Convention against Corruption (UNCAC). The G20 countries have also committed themselves to recovering the proceeds of corruption, and at their 2010 summit passed a surprisingly ambitious anti-corruption plan. Aid agencies have built anti-corruption into their policies, including references in the Accra Agenda for Action.
Why recovery is an issue
Recovery of stolen assets has taken its place as one of the pillars of anti-corruption action. Why? “Three incentives drive the asset recovery agenda: a resource mobilization incentive; a law enforcement incentive; and moral and reputational considerations, which encompass both the belief that it is wrong for corrupt officials to benefit from stolen loot and the concern that the reputations of those who fail to act will be tarnished,” says the Stolen Asset Recovery Initiative. “Similar incentives drive public policy on the proceeds of crime. There are parallels between these agendas, not least because efforts to tackle the proceeds of corruption use the institutional and legal framework established for broader law enforcement purposes.”
It is not just that a problem (corruption) has been recognized, but also a solution (legal action to freeze and recover the proceeds). In the 1980s, it became more common to use asset forfeiture against criminals, going against the economic basis of criminality and in particular drug trafficking. Controls on money laundering were stepped up. In the same way, the tightening of the rules after 9/11 affected the way that countries and governments went after the corrupt. The fight against corruption has become part of a broader effort to establish rules and definitions for dealing with international and transnational criminality in a context of globalization and concern about its risks.
The first landmark in the recovery of assets, the case of former Philippine President Ferdinand E. Marcos precedes the end of the Cold War, in 1986.7 The task was tough, but some valuable precedents were laid down. Since then, there have been dozens of cases, with more or less success: Haiti and the Duvaliers, the second major case, came soon after, and it continues to this day. Other, more successful cases came in the 2000s, including Nigeria and Sani Abacha, and Vlademiro Montesinos in Peru. (Carrington, 2010), (World Bank and UNODC, 2009), (World Bank and UNODC)
Increasingly the work has been codified. In 2007 the World Bank with the United Nations Office on Drugs and Crime launched the Stolen Asset Recovery (StAR) Initiative, “an initiative to help developing countries recover assets stolen by corrupt leaders, help invest them in effective development programs and combat safe havens internationally.” It was a bold and interesting move, putting ideas, people, money and action behind the concept, and combining a development and financial institution with one focused on criminality and law enforcement. The project aimed to build institutional capacity in developing countries, strengthen the integrity of financial markets, assist asset recovery, and monitor the use of recovered assets. Yet the record of successes is less than might be expected. In the first case, the record has been poor. “Marcos and associates made off with an estimated $5-$10 billion through a variety of corrupt schemes,” notes the Bank. “To date, the Philippines has managed to recover about US$684 million from foreign jurisdictions.” Early in 2013, it looked likely that the search would finally sputter out, as lawmakers in the Philippines proposed disbanding the Presidential Commission on Good Government, the asset-recovery program launched in 1987. The cost and returns were not matching up. “There remains a huge gap between the results achieved and the estimated billions of dollars that are stolen from developing countries,” says StAR. ”A total of $1.225 billion assets were frozen between 2006 and 2009 and $277 million assets were returned to the country of origin. These amounts are only a tiny fraction of the estimated $20 billion to S40 billion that are stolen annually from developing countries and hidden in financial centers.”
Why tackling recovery is tough
After the Arab Spring, there were promises that asset recovery would be a priority. But two years later, the Egyptian government complained that too little had been done by the British government. Assem al-Gohary, head of Egypt’s Illicit Gains Authority, told the BBC: “The British government is obliged by law to help us. But it doesn’t want to make any effort at all to recover the money. It just says: ‘Give us evidence’. Is this reasonable? We are in Egypt, looking for money in the UK.”9 There were accusations that Britain had allowed former officials and their cronies to keep millions of pounds of property and business assets in the UK, because “ministers are more interested in preserving the City of London’s cozy relationship with the Arab financial sector than in securing justice.”10 A British minister retorted in the politest possible way that rules are rules. “It will take time to achieve the results we all want. Asset recovery requires painstaking work and we must ensure proper judicial processes are followed,” wrote Jeremy Browne, the UK’s Minister of
State for Crime Prevention, in Al-Ahram. “Whilst there is a moral imperative for this work to be carried out swiftly, it should not be at the cost of depriving individuals of their rights.”
Most international co-operation is hard if it is worth anything. But in its complexities, legal and financial niceties, and adversarial nature, asset recovery presents problems that tax the brain and sap the spirit. An asset recovery is like engaging in a knife fight while conducting a divorce case by telex, in Latin. It requires brains, patience and aggression. Finding those with the required skills is not easy. “Few countries have expertise in this area and governments tend not to prioritise it, whether on the requesting or requested side.”11. It is a specialist area, or more accurately several specialist areas. The processes can be described as: Instigation, tracing, freezing, confiscation or forfeiture, and return.
The legal—procedural obstacles are usually primary. Asset recovery involves working across borders, between governments, which is tough at the best of times. There are reasons why it is hard to find and seize someone’s assets: individuals have rights and amongst them, in most societies, are rights to privacy, due process, protection of private property and equal and fair treatment under the law.12 This applies to ex-dictators too. It may even apply more, since international law reserves certain prerogatives to states and their representatives. It is no small matter to abandon these: most people don’t believe that an individual should have their bank accounts taken by the U.S. government on arbitrary grounds, or just because it has taken a dislike to a foreign politician.
The second set of obstacles is informational and financial. Investigators are trying to find money that has been deliberately concealed by a disciplined, well-funded, well-informed individual with access to state power, global banks and smart lawyers. And money can be moved very rapidly.
There are other layers of difficulty that are primarily political. In many cases, the pursuing government will lack the capability to investigate. In the case of Libya, for example, the state had almost vanished. Even had it not, the Libyan government had not built capabilities to chase funds stolen by its rulers. And in cases where anti-corruption efforts have been pursued subsequent governments have not always been supportive. In the countries where assets have been transferred, there will also be politics.
The Stolen Asset Recovery Procedure
- The case may start with the changing of a regime, peacefully or otherwise, a criminal prosecution, whistleblower allegations, or media claims.
- Investigators trace assets via documents, electronic data, informants, accounting, and information from banks and governments. Some may be available locally or via open sources; much will require help from overseas governments. It is important that this be done discreetly and fast.
- Once the assets have been located, they must be frozen in place by a prosecutor, magistrate or judge. Different jurdisdictions have different rules. Again, it will be critical to maintain confidentiality until the freeze is in place, and to gain co-oepration with other governments.
- The assets must now be taken through a confiscation or seizure order. There are different routes depending on jurdisdiction and circumstances, including criminal or civil proceedings. Again, requires working with other jurisdictions to get orders and to enforce them.
- Assets must be transferred back to where they came from. This raises a number of issues, like costs to other jurisdictions, compensating those who may have lost out in other ways, and ensuring that the proceeds go to the right place (and do not get embezzled again).
Follow the rules: Legal, technical and procedural problems
The toughest, most detailed and least glamorous part of the work that has been done to ease recovery of stolen assets concerns the removal or easing of legal and procedural barriers.
Making the rules work: Removing the barriers
It’s hard for countries to work together. They have different legal systems, police forces, governments, political processes and histories, embedded in different sovereignties (and conceptions of sovereignty). There are processes for requesting help from other countries – Mutual Legal Assistance requests, for example – and the strengths and weaknesses of this government-to-government system account for many of the issues. StAR’s landmark study Removing the Barriers to Recovery13 lists a series of steps to make things easier using official channels, the most established way of proceeding. Most of the barriers identified are in the categories of legal, technical and procedural:
Asking for assistance: MLAs can be large, complex and hard to understand or execute. Some countries may require information that is hard to find, or have very detailed procedures, and a request may seem too vague. It’s important to be flexible, but the word “legal” is there for a reason.
Managing assistance: Simply managing the MLA process can be bureaucratic, slow and frustrating – getting confirmation, responses, addresses and names, processes, timelines, clarity on jurisdiction.
Co-coordinating domestically: MLAs, information and co-operation requests are complex to co-ordinate domestically, and can receive less attention than local matters.
MLATs: A Mutual Legal Assistance Treaty is the basis for legal co-operation. Not every jurisdiction has such agreements with every other jurisdiction, some are old, and some don’t reflect the realities of international asset recovery.
Refusal of MLA: it is too easy for a country to simply refuse an MLA with little response, or a bland reference to “economic interests”.
Informal assistance: in many cases, co-operation will be speedier and more effective if done informally, without an MLA – but through a structured process. Contacting witnesses, temporary freezes, provision of public records can all be done in this way.
Statutes of limitation: many corruption cases go back years. Officials may also remain in office to wait out the limitation. There are ways round this (changing laws, or using alternative offences).
Legal co-ordination: Prosecutors may wish to reach a plea agreement – but that may have big implications for other jurisdictions and cases.
Dual criminality: some extradition laws require that the offence on which an individual is being extradited should be an offence in both countries.
Confidentiality: in some countries, if a financial institution sends information on a customer, it has to notify them. In an asset search, this gives a well-resourced criminal time to shift cash and disappear.
Immunity: In some cases an individual is immune from prosecution because of holding office. Some countries may also extend immunities to foreign officials.
Moving quickly: Sometimes, an expedited procedure is needed on information, assets or people. It is useful to be able to make temporary freezes without an MLA when time is tight.
Non-conviction based confiscation: This allows for confiscation of assets even where the asset holder has not been convicted, but some countries do not permit it. This can be a problem if the corrupt leader is “dead, a fugitive, absent, immune from prosecution.”
Standard of proof: An asset search is a speculative business. Very strict standards may make it practically impossible to get restraint orders – but on the other hand, there needs to be evidence.
Restraint and confiscation: Freezing assets, keeping them frozen and then taking them can be protracted and complex, but the freeze needs to be rapid or money will move. Laws often need to be updated, and to accommodate complex cases. Foreign orders may not be enforceable.
Handling the money at the end: Jurisdictions need legislation for disposing of assets, and selling them promptly, so they hold their value. Who sends money back, and to whom? With what conditions?
To some degree, these issues can be dealt with by gradually changing laws – piecemeal legal reform. To some degree, it requires changes of attitude, which is harder. This classic route – using criminal law, and official machinery – is tough.
One of the biggest and most significant advances has been the use of non-conviction-based civil forfeiture: using civil, not criminal action, and going directly against assets rather than individuals. This avoids problems associated with individuals who haven’t been convicted (or are still in office), or where the criminal trial is still under way. “Because it is against the property, an NCB forfeiture action is not dependent on a criminal conviction and may be pursued even if the corrupt official is dead, a fugitive, has been acquitted of a related
criminal offense, is immune from criminal prosecution, or enjoys residual political influence making criminal prosecution not possible,” wrote Linda Samuel, a senior U.S. official.
One example of new ways to focus skills, money and co-ordination has come about through the U.K. government’s realignment of anti-corruption strategy in the early 2000s, under the Department for International Development. Making DFID the focus emphasised that corruption was a development issue. “The Department for International Development (DFID) is the U.K. Government lead for UNCAC. It also has a specific interest in preventing U.K. individuals and companies from contributing to corruption overseas, especially in developing countries. It funds the Metropolitan Police’s Proceeds of Corruption Unit and the City of London Police’s Overseas Anti-Corruption Unit, as well as a small corruption intelligence cell in SOCA and part of the asset recovery work of the Crown Prosecution Service.”15 The logic behind the move was that without such funding and support, anti-corruption work wouldn’t get the backing it needed.
How successful has this been? While the results aren’t negligible, they are small in the overall scale of grand corruption. There is evidence that the investment has played a useful role in realigning British government efforts, and in particular in tackling cases of corruption in Nigeria. The US, too, has been coming up with new ideas to make the existing system function better, and investing in resources and institutional capacity. In 2010, Attorney General Eric Holder announced the creation of a new Kleptocracy unit at the Justice Department, focused specifically on this issue. “The unit is housed in the Asset Forfeiture and Money Laundering Section of the department’s Criminal Division and… staffed by five lawyers, Justice Department officials said. The Federal Bureau of Investigation’s Asset Forfeiture and Money Laundering Unit, based in the bureau’s Washington headquarters, has diverted two agents to the effort… They will supplement the work of established anti-corruption groups in U.S. Immigration and Customs Enforcement and the FBI’s Washington field office.”
Switzerland, too, has moved to make the rules work better, through the Restitution of Illicit Assets Act (RIAA), also known as Lex Duvalier. “Specifically, the RIAA allows for asset confiscation in situations where the current state of the victim country renders it impossible to conduct a proper exchange procedure via traditional judicial procedures. In these cases, the RIAA would allow a unique “burden shift,” requiring the Swiss government to show that: (1) the funds held in Switzerland by an alleged corrupt official are significantly larger than what someone could have credibly earned in office; and that (2) the country from which the funds originate is known to be corrupt. The burden of proving that the money came from legal sources would then shift to the allegedly corrupt official, rather than the Swiss state.” Making the existing rule set work better is a valuable goal. There’s no doubt that the search for assets of the deposed Arab rulers got off to a swifter start than in most previous transitions. Changes in the rules have had valuable effects in Nigeria, Peru and other asset recoveries, too. But the rules aren’t always right for the situations that anti-corruption campaigners and others find themselves in. This has led governments, NGOs and private actors to seek other ways forward that go beyond the classic route, which is so heavily reliant on official channels.
Going around the rules: Private action and alternative approaches.
Government-to-government action isn’t the only way of tackling asset recovery. Non-state actors and processes play an important role already, and may play an increasing one in the future. Is it plausible to look to this as one way around the logjam that results from government co-operation and its weakness? The use of civil litigation, rather than criminal law, has great promise and potential. As one expert writes, “Civil law, allowing for confiscation and recovery based on the balance of probabilities, has a clear advantage, as the evidentiary threshold is not as demanding as it is with criminal actions. This civil standard or burden of proof also means that in civil proceedings, the link between the assets and the criminal acts at their origin needs be established only on the grounds of a balance of probabilities. Finally, civil recovery also opens alternative approaches as far as civil actions against third parties are concerned and for the participation of victims in the action. It also has the advantage of civil recovery in a totally different jurisdiction or even in several jurisdictions at once.”
Civil cases can be very useful as part of a strategic effort against a large, systematic corruption case that has used specialist means – offshore jurisdictions, trusts and shell companies. Several governments have used civil litigation to pursue stolen assets, as a complement and substitute for criminal approaches. Using the “classic,” government-led route, most evidence and intelligence is generated by government investigators. But that needn’t be the case. “Some techniques may require authorization by a prosecutor or judge (for example, electronic surveillance, search and seizure orders, production orders, or account monitoring orders), but others may not (for example, physical surveillance, information from public sources, and witness interviews),”17 says StAR. In civil cases, private investigators can seek information in many ways. “Private investigators do not have the powers granted to law enforcement; however; they will be able to use publicly available sources and apply to the court for some civil orders (such as production orders, on-site review of records, prefiling testimony, or expert reports); (Bacarese, 2008).
Civil cases often involve expertise from outside government – typically, lawyers, accountants and investigators. This helps address issues of capability. But they are typically expensive, by the standard of government salaries in London and Washington, let alone Cairo and Kinshasa. So their use raises issues of finance and value for money, as well as accountability and management. Civil processes bring other complex questions. They have been associated with negotiated settlements, where former officials return some of their assets while retaining a portion, as in the Abacha case: this is seen as a trade-off for greater speed, though it is of course highly controversial. The growth of civil litigation is also helping to spur the growth of new financial approaches, again not without complexity. Commercial litigation funding for asset recovery in corruption cases has been explored, and it is intriguing if also full of risk.
As Paul Carrington, Professor of Law at Duke University has written, the U.S. has always mixed private and public actions in the area of corruption. He points to the False Claims Act, which incentivizes “relators” to come to court with cases of fraud against the government. There are other routes for recovery that place more emphasis on the restoration of justice in the countries where bribery takes place. Some analysts have suggested action based on claims that corruption breaches human rights. “A recent publication by the International Council on Human Rights Policy and Transparency International outlines a systematic approach and suggest lines of argument that would support the causal links between corruption and a range of human rights violations,” StAR says.
There have been cases. In 2007, the Open Society Justice Initiative together with the Spanish human rights organization Asociación pro Derechos Humanos de España (APDHE) and EG Justice, a U.S.-based organization, filed a complaint to the African Commission on Human and Peoples’ Rights, arguing that the diversion of oil wealth by the rulers of Equatorial Guinea violates the African Charter on Human and Peoples’ Rights.21 And in France, a similar case has been brought successfully. “The initial complaint in the case, filed by anti-corruption groups Transparency International (TI) and SHERPA [advocacy website], accused the late Omar Bongo of Gabon, Denis Sassou-Nguesso of the Democratic Republic of the Congo (DRC), Teodoro Obiang Nguema of Equatorial Guinea and their relatives of acquiring luxury homes and cars in France with African public funds.”22
Going above the rules: Transnational approaches and the ICC
If existing rules don’t work very well, that is in part because they are international rules for a transnational problem. As with many other phenomena linked to globalization, the initiative goes to criminals if the rules rely on traditional interstate mechanisms: the exchange of messages, diplomatic niceties, embassies, protocol. Criminals don’t have to send MLAs. One solution might be to create new machinery at a transnational level, or to repurpose existing institutions. The most-cited potential forum is the International Criminal Court23. As legal theorist Sonja Starr has argued, “International criminal tribunals could contribute meaningfully to the fight against kleptocracy. They have considerable powers to trace, freeze, and seize stolen funds, and can exercise jurisdiction where other domestic or international remedies are unavailable… There is a strong legal argument for treating grand corruption as a crime against humanity based on existing treaties.”
There are reasons, however, why governments have been very hesitant in granting authority to the ICC and why they haven’t created a transnational structure to do more. The United States, of course, is not a participant in the ICC. It might seem logical for StAR, attached as it is to a multilateral organization and an international one, to operate as the global agency to carry out recoveries. That is not how it is designed. StAR cannot be involved in litigation or criminal proceedings, StAR cannot finance or get involved in legal representation, nor can StAR manage cases or be party to confidential communications between states. Its role is to support and assist, to facilitate communications and to help partners make informed decisions. 25 Governments are reluctant to cede power in this area to a “global FBI.”
Rather than aim for a single forum for asset recovery, it seems more useful to move towards a more open playing field – if not a single global regime, then a set of best practices and common approaches, as StAR has done – with many multiple “good” approaches. The ICC was used to seize assets belonging to members of the former Gadaffi regime in 2013, a potentially important precedent.
A lot of thought has gone on into making asset recovery better understood, and the barriers are clearer. But some of the obstacles will remain, because they are difficult and because the process is supposed to be hard. Government-to-government action will continue to be the primary focus of asset recovery, and it will be hard. While traditional government routes to recovery remain bureaucratically challenged, there is every incentive for others – private law firms, investigators, financiers, non-profits and all – to seek new routes. As StAR says, “Developments in this area are unlikely to be driven through a negotiated process in the framework of international agreement. Instead, alternative avenues will be opened through the decisions of national authorities, judiciaries and activist litigants.” In other words: watch this space.