President
Muhammadu Buhari has rather wisely turned the spotlight on recovering
stolen funds. The President recently confirmed that his government has
“received firm assurances of cooperation from the U.S. and other
countries on the recovery and repatriation of funds stolen from Nigeria.
According
to the President, “the government in the next three months will be busy
getting facts and figures needed to help us recover our stolen funds in
foreign countries.”
It’s no coincidence that the first priority
of the Buhari government is not to throw corrupt officials in jail but
to recover stolen funds. Nigeria is broke, and several of its 36 states
can’t even pay their workers’ salaries.
But
this is hardly surprising given that for many years the country has
fallen victim of systematic stealing by career politicians and soldiers
dabbling in politics. Previously considered a matter of “little brown
envelopes” corruption is now a huge “profitable business” for
politicians (and their families and friends, the so-called go-betweens
or ‘looting pipes’), corporations and financial institutions and
centers.
Stealing is odious, illegal and immoral but stolen
funds don’t stink, as corrupt officials continue to empty the public
treasuries for personal gains–to amass luxury cars, buy extravagant
homes, and enjoy exotic vacations–to the amazement and anger of millions
of Nigerians. Images of government officials lining their pockets with
the treasure of the poor are stark and raw.
Yet, corrupt
officials are allowed to keep their looted funds and thus reaping the
benefits of their corruption. The abundance of wealth of the ruling
class stands in stark contrast to the poverty of the majority of
Nigerians.
Allowing corrupt officials to benefit from their
crime has a degenerative effect on the institutions of governance, human
rights and the rule of law. Therefore, the Buhari government is spot-on
to focus on the return of stolen funds, as this can help take the
profit out of corruption, thereby reducing the incentive to act
corruptly. This notion of taking the profit out of corruption is
premised on a belief that the individual’s economic behaviour is
rational and based on a balance of interest and risk.
However,
asset recovery is complex, expensive and slow, requiring sound planning
and proactive actions by the government if any significant success is to
be recorded. Important documents and primary information will be needed
to allow forensic experts, accountants, lawyers, etc., to build a prima
facie case to initiate mutual assistance requests. Once stolen funds
are identified, the government must move swiftly to seize and freeze the
funds as a provisional measure, to prevent the possibility of funds
being moved around and closure of accounts.
The government may
for example request that a blanket disclosure and freezing order be sent
to targeted banks in Europe and North America where prima facie
information is available that stolen funds are deposited in those banks.
But none of these will succeed without the full and effective
cooperation of other states. That is why the “firm assurances of
cooperation” by the US and other unnamed countries is in principle to be
applauded.
Nevertheless, it has to be stressed that the way
jurisdictions like the US keeping stolen funds respond in practice to
requests for technical and financial assistance suggests that the
promise of cooperation should be taken with a pinch of salt. For
example, the US and the UK have not shown sufficient political will to
cooperate in the repatriation of Abacha loot. Although often touted as a
‘success story’, only a small part of the Abacha funds have actually
been repatriated by the UK and Switzerland. France even failed to
execute a letter of request for mutual assistance on the rather flimsy
ground that it was drafted in English!
Therefore, to make sure
that the US and other countries fulfil their promises to cooperate, the
Buhari government can make the best use of progressive rules on asset
recovery as contained in the UN Convention against Corruption (UNCAC)
which the US ratified on 30 October 2006. The UNCAC for example makes it
obligatory for states to exchange information and take measures to
facilitate the full return of funds to the countries from which they
were stolen.
Yet, the use of the UNCAC may not necessarily
guarantee success in securing the cooperation of financial centres
without the requisite political will to observe the rules on
international cooperation and assistance. Experience has indeed shown
that while many countries including the US, the UK (and Nigeria) have
ratified the UNCAC, the convention is rarely effectively implemented by
financial centres in Europe and North America.
In essence,
recovery of stolen funds still largely depends on the goodwill of the
states where the funds are located. Therefore, the Buhari government
would need to make a strong case on why it is in the public interest of
the US to facilitate recovery of stolen funds by Nigeria, as the US (and
other countries) won’t cooperate if cooperating with Nigeria is deemed
harmful to its public or economic interest.
However, Nigeria is
not entirely left to the political whims and caprices of the financial
centres. One way Buhari can deal with the cases of unwilling or
uncooperative financial centres and offshore havens is to consider,
first, the possibility of judicial intervention through the mechanism of
the International Court of Justice (already contemplated under article
66 of the UNCAC as a means of resolving disputes among states parties).
Second, in cases of jurisdictions that persistently violate rules on
international cooperation regarding asset recovery, the government
should work with friendly countries to put pressure on the international
community to consider imposing heavy political and economic sanctions
against those jurisdictions.
Although not an international
court, the OECD mechanism allows non-members like Nigeria to make a
request to its Working Group on Bribery or to its Secretary General. The
Buhari government can take full advantage of this mechanism by
requesting the Working Group and the Secretary General to include the
government’s asset recovery initiative on their “Tour de Table”.
Beyond
dealing with the issue of international cooperation, there are other
issues that will determine whether the government will succeed in its
asset recovery agenda or follow the failed initiatives of past
governments. For reason of space, only a few of these issues will be
highlighted here.
In the first place, the government’s asset
recovery initiative must be comprehensive and avoid selective justice,
consistent with the precepts of a social and democratic state based on
the rule of law. The principle of equality, according to which justice
should be administered equally for all, means that Buhari should seek to
recover stolen funds even from members of his own party and those that
may be involved in his government.
It’s equally important to
target not only the high-ranking government officials and politicians
but also the go-betweens–their families and friends–who may have helped
them to stash stolen funds abroad, as well as financial institutions and
centers that help to keep and hide ill-gotten wealth. Similarly,
Buhari’s asset recovery agenda should take a firm stance against
corruption in business transactions by establishing mechanisms to impose
direct liability on companies and multinational corporations for
bribing high ranking government officials.
The asset recovery
initiative must also cover the theft of security votes and false funding
requests for security operation or equipment by successive
governments—federal and states alike. This was in fact one modus
operandi by the late dictator General Sani Abacha to steal the country’s
wealth. Most of the funds were taken away in cash from the Central Bank
of Nigeria (CBN) through instructions from Abacha to his National
Security Adviser.
For example, the Adviser in one letter to
Abacha titled ‘special allocation of funds’ said “Due to some security
problems requiring immediate solution and implementation, I am
constrained to ask your Excellency to kindly give consideration in
approving funds to deal with the situation. The situation as I informed
you is desperate and imminent. It has to be dealt with properly and
urgently. These nagging problems which are in bad taste and not in our
national interest, involve some countries within and outside Africa.
Kindly approve £10 million, $50 million, and N250 million. The funds are
urgently required to solve this enormous task. Please approve.”
This
authorisation was then approved by Abacha and presented to the CBN for
payment. The funds were released and stashed abroad. Around 30 of such
letters were written over a three-year period from 1995-1998.
Furthermore,
the government would need to put pressure on financial institutions to
generate suspicious transactions reports involving high-ranking public
officials (known in money laundering law as Politically Exposed Persons,
PEPs) and share such reports with the appropriate authorities. Any
financial institutions failing to report or intentionally encouraging
PEPs should be severely punished to send a strong message to other banks
and financial institutions that it won’t be business as usual with this
government.
The government can also rely on article 20 of the
UNCAC regarding “illicit enrichment”, which allows for a reversal of the
burden of proof. The offense of illicit enrichment is defined as a
significant increase in the assets of a public official who cannot
reasonably or justifiably explain this in relation to his or her lawful
income. However, requiring a defendant to bear the burden of
establishing the legitimate source of the income in question is
problematic as it raises serious human rights questions such as the
internationally guaranteed right of presumption of innocence.
Nonetheless,
the inclusion of this corrupt practice in several anti-corruption
treaties, despite the human rights concerns that have been raised,
suggests that it has become an accepted concept in the global fight
against corruption. The use of the offence of illicit enrichment may
also be one reason Hong Kong has been hailed as one of the few success
stories in the fight against corruption.
But while holding
officials criminally liable for unexplained increases in their wealth
has considerable appeal, particularly in systems where the courts are
weak, as is the case in Nigeria, the human rights concerns against it
are understandable. While the accused should not be allowed to use human
rights as a ‘trump card’ to frustrate recovery of stolen funds or
defeat the course of justice, the need for an effective fight against
corruption (and money laundering) must constantly be balanced against
legitimate concerns to safeguard human rights of the accused.
Once
the stolen funds are returned to the country there is also the
important issue of how to monitor the use of the funds to make sure that
they are not re-stolen or diverted, as it is alleged to be the case in
the returned Abacha loot. Here Nigeria can learn from the experience of
Kazakhstan where civil society groups were asked to supervise the use of
illegally obtained funds for the benefit of needy children. This
arrangement is permitted under article 57(5) of the UNCAC, which allows
states to enter into mutually acceptable arrangements for the disposal
of confiscated property.
Buhari should not enter into any deal
(so-called plea bargain) with corrupt officials or their families (as
former President Goodluck Jonathan shamefully did with the returned
Abacha loot) to share part of recovered funds, as to do so will be to
allow them to profit from their crime, thus providing the gateway to
impunity which can only further encourage corruption among high ranging
public officials. In fact, the government should review any such deals
with a view to achieving justice for victims of corruption.
Nonetheless,
an entrenched culture of corruption is extremely difficult to
transform. To effectively address it will require reform of political
institutions that are often resistant to change. Buhari should refuse to
listen to those who may want to resist change because the status quo
serves their interests.
Nigerians remain optimistic that a
change in leadership would bring accountability in government and that
they will now be able to enjoy the benefits of good governance in the
form of access to basic necessities of life. One can only hope that the
new found hope is not short lived, and that Buhari will be able to
deliver on his promises of ending corruption by working hard to take the
profit out of corruption.
As Montesquieu wrote, “When a
republic has been corrupted, none of the ills that arise can be remedied
except by removing the corruption and recalling the principles; every
other correction is either useless or a new ill.” Removing the
corruption means stopping corrupt officials from reaping the benefits of
their crime.
- Dr Kolawole Olaniyan is the author of ‘Corruption and Human Rights Law in Africa’
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