Author Archives: Richard Messick

Guest Post: Watching Watch Wearers: More on Thailand’s Watchgate Case

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GAB welcome back Craig R. Arndt, an American lawyer now living in Bangkok. Craig has advised a variety of clients on corruption-related matters and represented corruption victims in damage actions. Below he offers a coda to Government Leaders Should Watch Who Watches Them Wearing Their Pricey Watches

In 2018 the Thai public was mesmerized by a photo showing retired General and then Deputy Prime Minister Prawit Wongsuwan wearing a luxury watch. Activists soon found other photos of him sporting a variety of watches together worth $1.5 million. General Prawit was widely mocked for his explanation that they had been loaned to him by a wealthy now deceased friend and that he was not required to report them on his asset declaration form (here and here).

Thailand’s National Anticorruption Commission (NACC) did investigate the non-disclosure claim, it found nothing wrong. Prawit continued his political career, unfazed and unaffected by what had been short-lived damage to his reputation (here). He was the candidate for Prime Minister for the current ruling party in the recent election. Although that party split, his party still gained 40 seats in the face of a resounding defeat of the generals and their allies (here).

Although the NACC concluded that Prawit failure to report the watch collection did violated the asset disclosure law lot violated the law requriwas willing The agency, however, offered no justification for letting Prawit off the hook (here). Thailand’s increasingly assertive civil society was not ready to let the matter drop.

Political Activist Veera Somkwamkid asked the Administrative Court to order NACC to disclose its findings in the Prawit case. The first level administrative court agreed, and April 2023 the Supreme Administrative Court (SAC) upheld the decision and ordered full disclosure of the NACC Prawit files (here).

The SAC’s decision in the Prawit case does not set a precedent under Thai law. The NACC can thus refuse to disclose its reasoning in future cases, meaning those seeking their disclosure will have to tread the path Veera took in Prawit’s. It may a be a slow and treacherous one, but the NACC and Thai officials are on notice it’s a path determined civil society activists are willing to take.

Prawit may still find it easy to find the time of day given his glitzy watch collection, but in Thailand time may be running short on politicians of his ilk

Government Leaders Should Watch Who Watches Them Wearing Their Pricey Watches

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Peruvian President Dina Boluarte is the latest government leader to be ensnarled in a corruption flap thanks to a penchant for high-end time pieces. Before her it was the then-Prime Minister of Croatia Ivo Sanader (here) and after him the then-Thai Deputy Prime Minister Prawit Wongsuwan (here).

Like them, she apparently believed wearing a different expensive watch on different occasions was part of the job of running a country. And like them, her luxurious taste was caught on camera. Photographs show her at one or another function modeling watches that in toto cost more than $500,000.

From the collection of Peruvian President Dina Boluarte. Source: Presidential Flickr account

Just as with the Sanader and Wongsuwan flaps, photos of Boluarte’s watch collection prompted uncomfortable questions: Why didn’t she report the collection on her income and asset declaration form as required by law? And how could she, like them a longtime government employee, afford such a pricey collection?

Despite Sanader and Wongsuwan’s lame explanations –“I didn’t know I had to report them.” “Oh wait, they aren’t mine, I just borrowed them.” – the exposure of their unexplainable wealth cost them nothing more than civil society reproaches. Whether Peruvian authorities will accept Boluarte’s similarly flimsy explanations remains at this writing to be seen.

Beyond the reminder that some government leaders are incurably venal, these serial watchgates offer lessons. For leaders enamored of fancy timepieces, report them on your income and asset disclosure form or keep them up your sleeve when a photographer is nearby. For anticorruption agencies, there is a less flippant, more important lesson.

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Gretta Fenner 1975–2024: Addenda Memorial Service Information

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GAB sadly reports passing of Gretta Fenner, Managing Director of the Basel Institute on Governance and Director of its International Centre for Asset Recovery. A close friend of this writer and a true champion of the global fight against corruption, she died Saturday evening in an automobile accident in Nairobi. A message from Basel Institute’s President is here.

Dear friends and followers of the Basel Institute,

You will doubtless by now be aware of the tragic passing of our Managing Director Gretta Fenner last weekend.

Even as we grieve, we have appreciated the countless messages of condolence and tributes that have been flooding in from all corners of the world. Their depth and breadth are testimony to the extraordinary woman that Gretta was and the passion that she inspired in the anti-corruption community and beyond.

Many have shared their sympathy and memories on LinkedIn, X and Facebook.

For those close to Gretta who wish to transmit a message to the Institute’s team or her family and partner, please fill in this form. 

A selection will also be displayed on a public tribute web page that is under development.

Many thanks from all of us at the Basel Institute on Governance

Memorial Service

The Memorial Service for Gretta will be held on Wednesday, 8 May at 14:00 Swiss time at the Grossmünster in Zurich. Live streaming will be available at this link. 

In lieu of flowers, donations can be made to support the tennis club in Nairobi, which Gretta helped to set up and where her son Lukas had a wonderful time earlier this year. View details.

IMF Staff: British Virgin Islands A Haven for Fraudsters, Tax Cheats, Corrupt Officials, Other Assorted Financial Crooks

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The IMF staff doesn’t put the conclusion to their report on the British Virgin Islands’ antimoney laundering controls as starkly as the headline to this post does. But its February 27, 330-page assessment of the island nation’s efforts to curb money laundering leaves no doubt the headline is accurate.

The report finds regulatory oversight of the financial sector is sparing at best, and in the rare instance when a violation is detected, the penalty is laughably weak. What seals the deal for those needing a safe place to stash money from corruption, drug dealing, and other financial crimes is the “who cares about others” attitude of the authorities for crimes committed elsewhere.

“The relevant authorities and key reporting institutions broadly view the illicit activities of the foreign beneficial owners as having an insufficient nexus with the territory and do not consider that VI entities are directly involved in such activities.”

IMF Country Report No. 24/55. British Virgin Islands: Detailed Assessment Report on Anti-Money Laundering And Combatting The Financing Of Terrorism

In other words, if you want to put money you stole from the citizens of your country in our banks or take advantage of our lax approach to verifying who really owns a BVI corporation to keep your country from finding your assets, fine by us. Not our problem.

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U.S. Justice Department Does What Mongolia’s Government Wouldn’t

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GAB readers will remember posts in late 2020 and early 2021 recounting damning evidence implicating Mongolian political kingpin S. Batbold in a massive corruption scheme (here, here, and here). Although Batbold fiercely and forcefully denied the allegations to GAB (here), the evidence that corruption during his tenure as Prime Minister netted him tens if not hundreds of millions of dollars seemed overwhelming.

So overwhelming that it prompted the Mongolian government to open a corruption investigation in Mongolia and initiate litigation in the United States to recover New York real estate press reports showed he had bought with corruption proceeds. Nothing came of either, however. Batbold runs the country’s dominant political party, the Mongolian People’s Party, and after a protégé won the June 9, 2021, presidential election, both the Mongolian and New York cases were shut down.

But the evidence did not go away. Yesterday, the U.S. Department of Justice took up what Mongolia had dropped, filing suit to seize the two New York apartments Batbold owns. As the head of the Department’s Criminal Division explained in disclosing the suit:

“Sukhbataar Batbold used his position as prime minister to award lucrative contracts to sell copper concentrates from a Mongolian state controlled mine to entities that were owned and controlled by his known associates or his son. These intermediaries, who had little to no experience in the copper trade, played no part in providing financing for the purchase of the copper concentrates or in arranging the sale or shipment of the commodities. They simply concealed the fact that Batbold and his family were violating Mongolian anti-corruption laws by benefiting from the sale of millions of dollars’ worth of Mongolian natural resources.

“The former prime minister of Mongolia abused his position as prime minister to profit from the sale of his country’s natural resources.  He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States.”

The Department’s Kleptocracy unit is responsible for the case, and consistent with its kleptocracy policy, the Department said it would work to see that the proceeds of whatever property of Batbold is recovered would go to the people of Mongolia, “the people harmed by these acts of corruption and abuse of office.”

Mongolians elect a new parliament June 9.  Suppose they might want to ask why it was left to the Department of Justice to do what their government should have done long ago?

Gibraltar Government on Trial for Corruption

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Today’s Guest Post is by Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption, University of Sussex (UK); and formerly the Chair of Transparency International’s International Council.

With a population of a mere 34,000 and a parliament of 17 elected members, Gibraltar seldom attracts the world’s attention, except in the periodic spats between Britain and Spain as to its territorial status.  One of Britain’s Overseas Territories, like the Cayman Islands and British Virgin Islands, it’s part of the remnants of the Empire which never became independent.  Like those other territories, Gibraltar has become a financial centre – particularly known for online gambling – and is officially ruled by a hands-off Governor on behalf of the British crown.

Small states have a very mixed record when it comes to corruption.  Some, like Singapore and Hong Kong (prior to the recent ‘Chinafication’), have in the past successfully led crackdowns on corruption, backed up by powerful and effective anti-corruption agencies.  But small states can all too easily be captured by vested interests and go in the opposite direction – see, for example, Wouter Veenendaal’s article on ‘How smallness fosters clientelism; a case study of Malta.’

The picture in Britain’s Overseas Territories is relatively obscure.  They are so small that they do not generally feature  on global indices of corruption. There is usually a non-existent, or at best government-friendly local media and civil society; independence – in the judiciary, police, or other pillars of the state – is hard to achieve when everyone knows everyone.  Ideal conditions for state capture.

Many of the Overseas Territories dance on the edges of the FATF greylist, periodically creeping on and off. Gibraltar was added to the list in June 2022 and removed in February 2024.  The British Virgin Islands, Turks & Caicos and Cayman Islands have all had corruption scandals at the heart of government, often related to dirty money.  In fact, it is thanks to those scandals and the subsequent attention they garner (via the international media, public enquiries, and occasionally prosecutions) that we have at least a partial picture of what is going on.

So what is happening in Gibraltar? 

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Job Postings: Centre for the Study of Corruption and International Centre for Asset Recovery

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Two first-rate anticorruption NGOs have openings —

The Centre for the Study of Corruption (CSC) based at the University of Sussex in the UK has recently received a multi-million dollar grant from the UK government to research Anti-Corruption Evidence (ACE) – part of the wider ACE programme run by the Foreign, Commonwealth & Development Office. It has openings with a closing date of March 25th for two positions: Programme Manager (details here) and Comms Manager (details here).

The Basel Institute on Governance is an independent non-profit organisation working across sectors to counter corruption and related financial crimes and to improve the quality of governance. Registered as a Swiss foundation with headquarters in Basel, the Institute works globally and maintains field operations around the world. The International Centre for Asset Recovery (ICAR) is a division of the Basel Institute that aims to strengthen the capacities of countries around the world to recover assets stolen through corruption. It has an opening for a (Senior) Specialist, Asset Recovery Policy (details here.)

The Fake News and Corruption Behind the Criminal Investigation of Transparency International

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Transparency International and its Brazilian chapter are now the subject of a criminal investigation in Brazil. As GAB readers know (here), the investigation is part of Supreme Court Justice Dias Toffoli’s crusade to reverse the convictions handed down in Lava Jato, the landmark Brazilian corruption case. The aim is to ensure defendants escape all punishment in Brazil and are protected from prosecution in the dozen other Latin American and African countries where they paid bribes.

Today’s Guest Post by a Brazilian insider reveals just how groundless the investigation of TI is and Justice Toffoli’s direct conflict of interest in letting one of the Lava Jato defendants off the hook. The author explains that it starts, as the respected Brazilian journal Crusoé explains in the headline to its February 16 issue, with “A HISTORY OF FAKE NEWS AGAINST TRANSPARENCY INTERNATIONAL: How the narrative was planted, leaked, refuted and reheated in the PGR [Federal Attorney General Office] to retaliate the anti-corruption NGO.”

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Brazilian Supreme Court Justice Orders Investigation of Transparency International

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Six days after it reported in its annual survey of corruption perceptions that the fight against corruption in Brazil was losing steam, Transparency International was placed under investigation by Supreme Court Justice Dias Toffoli (here). The ostensible reason is that the internationally renowned corruption fighting organization, headquartered in Berlin with a Brazilian chapter, misused public funds.  According to the justice, the group is a “foreign” organization and thus funds received in Brazil for its anticorruption work should have been allocated to the national treasury.

TI immediately issued a statement denying all wrongdoing. In the statement it pointed not only to the close connection between release of the 2023 CPI and Justice Toffoli’s decision to open an investigation, but to the criticisms the international organization and its Brazilian chapter have levelled against Justice Toffoli’s continuing efforts to gut Lava Jato, the case where a cartel led by the Brazilian engineering and construction firm Odebrecht bribed some 415 politicians and 26 political parties in Brazil as well as dozens officials in ten Latin American and two African countries (here).

Last September the justice tore up 2017 cooperation agreement between prosecutors and Odebrecht, making it difficult if not impossible for prosecutors in other nations to pursue charges against the company and those it bribed in their countries (here). Last week, as the Financial Times reported in breaking the investigation story, Toffoli issued another ruling letting Odebrecht off the hook; this one suspends a multimillion-dollar fine the company had been ordered to pay.

Brazilian citizens, opposition parties, and Brazil’s friends in the international community have all begun to speak against this effort to undo one the largest — and for its faults (as rehearsed on this blog (latest post here)) — one of the most important steps forward in recent years in the fight against corruption. In Brazil, its neighbors, and indeed globally.  

Let’s hope Brazilian authorities hear them.

Does Congress Really Want to Relax Corruption Controls on U.S. Arms Sales?

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Today’s Guest Post is by Colby Goodman, a Senior Researcher with Transparency International US and Defence and Security. His research focuses on corruption risks within the international arms trade and other forms of defense sector corruption. 

That corruption permeates the international arms trade is no surprise to readers of Transparency International reports (here), business executives (here), or investigative reporters (here, here, and here). What is a surprise is that the U.S. House of Representatives is considering weakening the measures the U.S. government has put in place over the past decades to prevent U.S. companies from becoming entangled in corrupt dealings.

This Tuesday, February 6, the House Foreign Affairs Committee will discuss a bill to significantly decrease the number of proposed U.S. arms sales that would require congressional review before proceeding. The bill would increase the dollar threshold that require  the Defense and State Departments to notify Congress of a planned sale. It follows a US defense industry lobbying campaign to speed up the process in delivering U.S. weapons and so make their purchase more commercially attractive. But at the cost of weakening key U.S. government efforts to curb corruption in U.S. arms sales.

To its credit, in early 2023 the Biden Administration  updated the government’s Conventional Arms Transfer policy to “ensure that arms transfers do not fuel corruption or undermine good governance, while incentivizing effective, transparent, and accountable security sector governance.”  This policy followed its Countering Corruption Strategy, where  the U.S. government pledged to start “reviewing and re-evaluating criteria for government-to-government [security] assistance, including around transparency and accountability.”  These actions recognized the significant harm to U.S. national security that comes from pervasive corruption in partner countries and the need to mitigate corruption risks within the U.S. defense industry.  

Detailed below are four key critical corruption checks that would be undermined by the proposed bill.

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