UN CONVENTION TARGETS KLEPTOCRAT RULERS

By Peter Eigen and - - Reprint | | Print |

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BERLIN, May 1 2004 (IPS) - In election campaigns this year in Indonesia and the Philippines –countries that have been impoverished by the greed of successive corrupt leaders– the presidential candidates have battled one another for the anti-corruption mantle, writes Peter Eigen, Chairman of Transparency International. In this analysis for IPS, Eigen writes that both countries are case studies in how corrupt leaders who take advantage of immense personal power and immunity from prosecution can devastate their populations by systematically plundering their wealth. The recent adoption of the United Nations Convention against Corruption is an important step towards the repatriation of money siphoned off by nefarious leaders. The first-ever UN International Anti-Corruption Day will be held on 9 December to pressure governments to ratify the Convention so that stolen assets can be returned to their rightful owners. Thirty ratifications are needed before the Convention comes into force. Citizens have a right to know what happens to the money managed by public officials in the developed and developing worlds, and to insist that donor and other government funds reach the intended recipients – the people.

In election campaigns this year in Indonesia and the Philippines –countries that have been impoverished by the greed of successive corrupt leaders– the presidential candidates have battled one another for the anti-corruption mantle.

The two countries are case studies in how corrupt heads of state who take advantage of a combination of immense personal power and immunity from prosecution can devastate their populations by systematically plundering their wealth. And both provide sorry tales of legal loopholes and a lack of political will that time and time again prevent money secreted into offshore accounts, pet projects, and unnamed bank deposits from being returned to its rightful owners, the people of the respective countries.

A glance at the figures involved, highlighted in Transparency International’s Global Corruption Report 2004, shows how urgent the problem is. Three of the most notorious leaders of the past two decades –former presidents Mohamed Suharto of Indonesia, Ferdinand Marcos of the Philippines, and Mobutu Sese Seko of Zaire (now Democratic Republic of Congo, DRC)– allegedly embezzled between 25 and 50 billion dollars from their respective countries, where, it should be noted, the average income is less than a thousand dollars per year. In DRC, it works out to a mere 27 cents per day.

Much of the money that ended up in the pockets of such leaders came from northern governments, multilateral lenders, and donor agencies. Zaire under Mobutu Sese Seko received more than USD12 billion in aid, mainly from the World Bank. Estimates –it is almost impossible to know the real figure– put the sum Mobutu diverted at around USD5 billion. His actions not only denied the population schools, teachers, hospitals, and medicines, but left the country burdened with a crippling debt.

Corruption has impoverished the populations of some of the countries richest in natural resources. In Nigeria, the amount that General Sani Abacha allegedly looted between 1993 and 1998 –as much as USD5 billion– represents about 10 percent of the country’s income from oil over his five years in power. According to a recent report by Human Rights Watch, more than USD4 billion in state oil revenue disappeared from Angolan government coffers from 1997 to 2002, roughly equal to total government spending on social programmes in the same period.

Efforts to repatriate the money stolen by former corrupt leaders have all too often been thwarted by loopholes in the international legal and financial system, or by a lack of political will on the part of the successor government. Significant headway has been made by the Swiss authorities to remedy the first of these problems. Legal action taken on behalf of the Holocaust victims in the late 1990s helped peel back strict banking secrecy in the country. The successes of resolute prosecuting judges, like Carla del Ponte and Bernard Bertossa, in disclosing and freezing assets, have turned Switzerland into a leader in the fight against money laundering.

In late 2003, Swiss authorities agreed to repatriate to Nigeria the USD618 million that was reportedly embezzled by Abacha. But more than this amount remains frozen in other jurisdictions, including Britain, where court action to retrieve an estimated USD1.3 billion has stalled.

The lack of political will can prove an even greater obstacle than the legal loopholes. The day before Mobutu was toppled in May 1997, Swiss authorities ordered all 406 Swiss banks to search for Mobutu’s accounts. They found just USD4 million. They then wrote to the new government in Kinshasa asking for clarification of ownership of the funds. Two years later, however, there was still no reply from President Laurent Kabila.

In this context, the recent adoption of the United Nations Convention against Corruption is an important step towards the repatriation of money siphoned off by nefarious leaders. The Convention commits signatories to enhanced co-operation and mutual legal assistance in the return of assets. It also aims to get states to require domestic financial institutions to adopt stringent ”know your customer” procedures. If every country were to adopt and enforce such measures to curb abuse of office, lax banking controls, and the use of offshore banks, opportunities for looting would be radically reduced.

Another important provision of the Convention is that it requires authorities to take action to freeze assets on the basis of ‘reasonable belief’ when asked by the competent authorities in the requesting countries. This eliminates the requirement of obtaining a court order from the requesting country, a process that is often cumbersome enough to give the malefactor time to move funds elsewhere.

Transparency International will be working towards the first-ever UN International Anti-Corruption Day on 9 December to pressure governments to ratify the Convention so that stolen assets can be returned to their rightful owners. Thirty ratifications are needed before the Convention comes into force. Kenya and Sri Lanka have taken the lead in ratifying it, and South Africa, Nigeria, and Cameroon are expected to follow.

Citizens have a right to know what happens to the money managed by public officials in the developed and developing worlds, and to insist that donor and other government funds reach the intended recipients — the ordinary people who have suffered so much at the hands of tyrants. (END/COPYRIGHT IPS)