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AFRICA: Western Recipient Governments Cling to Dirty Money

Hilaire Avril

PARIS, Jul 14 2009 (IPS) - In 2007, the French corruption watchdog Catholic Committee against Hunger and for Development (known by its French acronym CCFD) issued a first report on the colossal sums stolen by corrupt heads of states and hidden in mostly Western secret bank accounts. Figures are hard to come by, given the secrecy that shrouds such looting of public funds.

But CCFD’s research came up with assets worth between an estimated 105 to 180 billion dollars, stolen by 30 corrupt regimes.

CCFD recently published a second report, signalling a massive discrepancy between ambitious recovery targets and embezzled sums effectively retrieved to date. Despite numerous legal proceedings, less than five percent of assets stolen have so far been recovered.

“Dirty money doesn’t acknowledge borders, whereas justice systems still function according to strict geographic boundaries,” says Jean Merckaert, CCFD’s lead campaigner in France. The report says 4,4 billion dollars has been recovered, and a further 2,7 billion dollars frozen.

“In some cases, Western governments are in no hurry to divulge misappropriated assets located on their territory. They would rather not disclose their support to some of these corrupt leaders, even after their deaths,” Merkaert explains.

The sums diverted are so considerable that it has a direct negative impact on many countries’ development. The World Bank and the United Nations Office on Drugs and Crime, which launched the stolen assets recovery initiative (STaR) in 2007, say corruption is draining between 20 and 40 billion dollars a year from developing countries. Such amounts dwarf development assistance.

Beyond the depletion of precious public funds, such looting of the public treasury often generates mounting public debt. Mobutu Sese Seko, former leader of Zaire (now the Democratic Republic of Congo), not only diverted an estimated six billion dollars from his state’s coffers, he left the country with international debt of 13 billion dollars.

In comparison, the country’s total health budget for 2009 amounts to 41 million dollars, states CCFD.

The publication of the initial report in 2007 helped a number of civil society groups to launch legal proceedings in France’s courts to recover some of these assets located on French soil. Complaints were lodged against specific leaders, among who are Denis Sassou-Nguesso of Congo and the late president of Gabon, Omar Bongo.

“It was astonishingly easy to track some of these ill-acquired properties. Several of these names are listed openly in the French phone book,” according to Merkaert. “Some of these corrupt leaders are so used to utter impunity they do not bother with discretion.”

A large part of diverted public funds is never properly accounted for in their country of origin in the first place. Some are undeclared proceeds from mining and oil concessions, a practice the multilateral Extractive Industries Transparency Initiative is currently struggling to limit.

According to CCFD, Sassou-Nguesso’s regime “forgot” to account for billions of dollars worth of oil revenue between 2003 and 2005.

Once abroad, funds are hard to trace. Most sums end up in tax havens and countries which allow opaque legal practices, such as trusts or foundations never compelled to reveal their true owners. Many recovery procedures have bumped into banking confidentiality, with local authorities turning down victims’ requests to assist them in identifying accounts where the assets have been hidden.

Some assets are also laundered and “recycled”. The Bongo family is said to own a mansion on avenue Foch, one of central Paris’s most expensive addresses, among other prime items of real estate.

The 2007 legal proceedings have not yet yielded results. Despite confirming the existence of the suspicious assets and even adding new ones to the list, French courts have declared the plaintiffs had “insufficient cause”.

“We are now waiting for the Court of Appeals to decide on Sept 17, 2009 if it is qualified to hear these cases,” says Merkaert. Such delays have sometimes allowed the culprits or their descendants to move the funds to other accounts and countries. The partial restitution of the Marcos funds to the Philippines happened after a 17-year campaign.

Jean-Marc Bikoko, from Cameroon, has been trying to tackle the problem from the other end, in Yaoundé. The public sector union leader campaigns to recover funds looted by former Cameroonian ministers — an uphill battle. “All civil society can do is investigate and urge the administration to take action,” he explains.

“But the Cameroonian National Commission against Corruption has consistently been staffed with tainted characters, themselves accused of corruption, and the president reserves the right to approve its reports,” he laments.

“Campaigning for the recovery of stolen funds exposes you to endless harassment. As a civil servant, you are systematically vilified, often sued and sometimes jailed,” he adds.

But raising awareness of the cost of corruption has led some international organisations to pay more attention to embezzlement by corrupt politicians. The United Nations Convention Against Corruption, signed in 2003, built on that momentum.

“Although not every country has signed the convention, this is a major step: five years ago, we had no legal avenues to retrieve stolen assets. Now, their recovery by the country of origin is a recognized principle in international law,” indicates Merkaert.

But only national governments can enforce such principles. “Many of Mobutu’s assets (including one of Belgian colonialist king Leopold’s castles near Brussels) have been located but the current Congolese administration does not seem keen to recover them. Is that because one of Mobutu’s sons sits in the current government?” Merkaert asks.

“The recent commitment against tax havens taken at the London G20 summit is a good sign but we increasingly face the problem of ‘legal havens’, countries which make recovery proceedings exceedingly hard,” says Merkaert.

“In the past, France has turned down a request by Nigeria for legal assistance in retrieving funds stolen by former president Sani Abacha, stashed in French bank accounts, on the grounds that the official request was written in English, not French.”