Monthly Archives: December 2020

A GAB’s Eye View of 2020

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Thanks to WordPress, the free, open-source, amazing software that runs GAB, Matthew and I know something about our readers.  Don’t worry. It doesn’t tell us who you are or what your email addresses are, but WordPress does show us where you live and what posts you find of greatest interest.  As 2020 comes to its welcome end, we thought you would be interested to know where you come from and what topics most interest you.

GAB readers live in all but five of the 193 members of the United Nations and in one prominent non-member state.  Pope Francis himself may not be one of GAB’s Vatican City readers, but we would like to think that GAB posts chronicling the impact of corruption on less developed nations has in some way contributed to his forceful denunciation of corruption and the harm it wreaks on the least fortunate.

The five UN member states where not a single citizen read even one GAB post this past year are:

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Kleptocracy Strikes Mongolia? The Batbold Case Part II — UPDATE

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There is little doubt GAB’s Mongolian readers feel strongly about their former Prime Minister and possible 2021 presidential candidate Batbold Sukhbaatar. A December 8 post summarizing Offshore Alert’s December 7 revelations of charges he masterminded a massive corruption scheme sparked an avalanche of comments.  By contrast an earlier post recounting charges his likely rival, the current president, was corruption and had abused of power to control judicial appointments drew nary a word.

Comments on the Batbold case split roughly 50-50.  Half claimed the charges were fabricated with several seeing unnamed “foreign interests” behind them, and half believed every word of the government’s case and hoped Batbold would soon be brought to justice. Unfortunately for GAB readers neither from Mongolia nor schooled in developments there, none of the commentary offered any facts in support of their passionately asserted views.  Indeed, the only fact about the case that has appeared since the Offshore Alert article, at least in the English language press, is a story in today’s Times of London.

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Guest Post: Sierra Leone’s Tenuous and Incomplete Anticorruption Campaign

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Felix Marco Conteh, an independent research consultant based in Sierra Leone, contributes the following guest post:

Sierra Leone has a serious corruption problem. And while the importance of fighting corruption unites Sierra Leoneans—who tend to blame corruption for all the country’s socio-economic and political challenges—the citizens of this intensely polarized country remain divided on how to do so. The country seems to have fallen into a pattern in which each new administration pledges to tackle corruption, but adopts strategies that are aimed more at appealing to domestic and international constituencies in the short-term, rather than lay a foundation for longer-term success. The new administrations’ short-term strategies too often involve criminalizing politics in a way that appears to target the political opposition, contributing to deeper polarization and instability. Continue reading →

Is the Global Magnitsky Sanctions Program Working?

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The 2016 Global Magnitsky Human Rights Accountability Act (GMA), inspired by the imprisonment and death of Sergei Magnitsky in Russia after his discovery of $230 million in tax fraud orchestrated by the Russian government, stands as the boldest authorization of U.S. economic sanctions in the fight against corruption. Executive Order 13818, issued in December 2017, designated the first sanctioned parties under GMA, enabling asset freezes and travel bans.

Since then, approximately 150 individuals and entities worldwide have been sanctioned for corruption under the GMA. (The GMA also allows for sanctions against human rights violators, and such authority was exercised to target 75 more individuals and entities.) The list includes current and former government officials—or those acting on their behalf—in Cambodia, China, Cyprus, Democratic Republic of the Congo, Dominican Republic, Equatorial Guinea, Gambia, Iraq, Latvia, Lebanon, Mexico, Nicaragua, Serbia, South Africa, South Sudan, Uganda, and Uzbekistan, among others. The designations include familiar names in the anticorruption community such as Gulnara Karimova, former Uzbek first daughter convicted of embezzlement and other corruption totaling more than $1.3 billion, Dan Gertler, the Israeli billionaire who earned millions of dollars through underpriced mining contracts in the Democratic Republic of the Congo, and Angel Rondon Rijo, a Dominican lobbyist central to Brazilian construction firm Odebrecht’s $4.5 billion Latin America-wide bribery-for-contracts scheme. Other sanctioned parties include the former Gambian president and first lady for misappropriating $50 million in state funds, a former Mexican judge and a former Mexican governor who took bribes from drug cartels, and a Sudanese businessman who, along with senior South Sudanese government officials, embezzled millions of dollars from a government food program.

The GMA represents a new era of so-called “smart sanctions.” Instead of limiting transactions with an entire country—as in the case of U.S. sanctions programs targeting Cuba, Iran, North Korea, and Syria—these individualized sanctions are designed to maximize harm and minimize collateral economic damage by restricting only bad actors’ access to global commerce, not that of entire populations. This approach is catching on outside the United States, with Canada, the United Kingdom, and the European Union recently announcing their own GMA-esque sanctions, while other countries, like Australia and Japan, are actively considering adopting similar programs.

Yet, a fundamental question remains: is the GMA working?

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A Covid-19 Checkup: How the IMF’s Transparency Measures Have Fared So Far

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With a trillion dollars in lending capability, the International Monetary Fund (IMF) is one of the best-equipped institutions to deal with the Covid-19 public health and financial crisis. Since March, the IMF has met an “unprecedented number of calls for emergency financing” with “unprecedented speed and magnitude,” through renegotiations of rapid credit facilities, refinancing initiatives, and debt relief assistance for more than 100 countries, totaling over $100 billion in disbursements so far. In the early days of the pandemic, there was a great deal of concern among anticorruption advocates over the way these emergency funds would be monitored (see collections of pieces here and here). The IMF’s initial approach generally did not impose formal transparency or governance requirements as a condition for receiving emergency Covid relief funds. Rather, the IMF chose to rely more on after-the-fact safeguards: recipient countries were told to spend as needed but to “keep the receipts.”

The IMF’s approach is understandable. As Jason Keene argued on this blog, the IMF at that early stage faced a trade-off between speed and transparency, and may have reasonably concluded that it would not be advisable to bargain over transparency measures if doing so would slow the deployment of much-needed funds. This conclusion, as a May 2020 IMF publication revealed, was influenced by the IMF’s experience with the 2014-2016 Ebola outbreak in West Africa: Many, including a prominent public health journal, blamed the IMF for the lethality of the Ebola epidemic, provoking a backlash against what was seen as unduly burdensome loans, a focus on austerity, and the underfunding of medical systems in vulnerable countries (see here, here, and here). Given this background, it’s understandable that the IMF might, on balance, favor speed over transparency, providing loans for Covid-related public health and budgetary shortfalls without much conditionality.

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A Breaththrough in Recognizing Who is a Corruption Victim

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A decision of the U.S. District Court for the Eastern District of New York ruling shareholders of a company damaged by bribery are “corruption victims,” and its order affirming $135 million in damages establish an important precedent. The decision and order were handed down in a case arising from the prosecution of OZ Africa Management for violating the Foreign Corrupt Practices Act. OZ, a subsidiary of a U.S. hedge fund, had pled guilty to participating in a bribery scheme Israeli billionaire Dan Gertler engineered to gain control of the Democratic Republic of the Congo’s mineral resources.  As the case was about to close, shareholders in Africo, a Canadian company whose mining rights had lost value thanks to the bribery, filed a claim for damages under the Mandatory Victim Restitution Act, a statute requiring criminal defendants to compensate victims of their crimes.    

OZ and the prosecutors in the case both opposed the shareholders’ claim. Under the act, those claiming they were injured by a criminal offense must show they were “directly and proximately harmed” by it. Several events occurred between OZ’s bribes and the injury Africo’s shareholders sustained that blurred the causal link between the two. Both the government and OZ asserted that these intervening events made the shareholders at best indirect victims of corruption. And in any event the injuries were so far removed from the bribery that it could not be said the bribery proximately caused them.  Finally, OZ argued the damage the shareholders suffered, loss of the chance to develop the mine, could not be readily quantified, making any award “speculative” and “hypothetical.”

The difficulty in showing the harm from corruption is “direct” and “proximately” caused, and the challenge of precisely calculating the damage are not just hurdles to those seeking compensation for corruption under American law. They are commonly cited as reasons why, though virtually all nations permit corruption victims to sue for damages in accordance with article 35 of the UN Convention Against Corruption (here), virtually no one has (here, here [21ff], and here). While the court in OZ Africa Management was only construing a U.S. law, its reasoning offers courts in other jurisdictions precedent for awarding damages when their citizens are injured by corruption.  

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Guest Post: Why Nigeria’s Main Anticorruption Body Should Not Become a Debt Collection Agency, and How to Stop It

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Today’s guest post is from Pallavi Roy and Mitchell Watkins, respectively Research Director and Research Fellow at the University of London, SOAS Anti-Corruption Evidence Consortium (SOAS-ACE).

Nigeria’s Economic and Financial Crimes Commission (EFCC), established in 2003, was initially effective at investigating and prosecuting bribery, fraud, tax evasion, money laundering, and a host of other financial crimes. Indeed, it was instrumental in prosecuting senior political leaders and corporate actors involved in illegal activities, as well as in recovering significant stolen assets that belonged to the Nigerian state. More recently, however, the Commission has been subject to frequent political interference and corruption. For example, a recent SOAS-ACE study found that private actors—commercial banks, businesses, and high net-worth individuals—routinely exploit the coercive power of the EFCC to help them recover their debts, rather than turning to the courts and other civil dispute resolution mechanisms. This occurs even though, as a matter of law, civil debt collection lies outside the EFCC’s jurisdiction. Continue reading →

New Podcast Episode, Featuring Doussouba Konaté and Moussa Kondo

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Doussouba Konaté and Moussa Kondo, who are, respectively, the Program Officer for the Accountability Lab and the Country Director for Accountability Lab Mali. (The Accountability Lab is a civil society group organized as a network of local Accountability Labs that focus on fighting corruption and promoting accountability and integrity.) In our conversation, Doussouba and Moussa describe the Accountability Lab’s “human-centric” approach to fighting corruption, and discuss some of their main initiatives. These include the Integrity Icon project, which strives to “name and fame” honest government officials, and the civic action teams that help gather information in, and disseminate information to, local communities to facilitate collective action and promote accountability, while combating fake news. Our interview also discusses how, more recently, Accountability Lab Mali has sought to track the disbursement of COVID-19 relief funds. In addition to these specific initiatives, we also discuss the broader political situation in Mali and how the political challenges facing the country relate to the corruption problem, and what the highest priorities for anticorruption reform in Mali should be right now.

You can find this episode here. You can also find both this episode and an archive of prior episodes at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

What Made Alexei Navalny an Anticorruption Icon?

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On August 20, 2020, former Russian presidential candidate Alexei Navalny fell ill while on a flight from Tomsk to Moscow. He slipped into a coma and was immediately evacuated to Berlin, where doctors discovered that Navalny had been poisoned by a Soviet-era nerve agent. While the Kremlin has denied any involvement, the chemical nerve agent used on Navalny was similar to the one that Russia was accused of using to poison former Russian spy Sergei Skripal and his daughter in 2018.

A Kremlin-orchestrated attempt on Navalny’s life was hardly surprising. For the past decade, Navalny has been making a name for himself as one of the leading figures opposing Russian President Vladimir Putin and his United Russia party. Navalny has denounced United Russia as a “party of crooks and thieves” and has organized campaigns to unseat Putin-affiliated politicians across the country. Furthermore, Navalny’s investigative journalism has uncovered government corruption, and he has used these exposés to advocate for political reform and to bolster his own popularity, especially among the younger generation. Navalny’s success in exposing corruption highlights several interesting and unique tactics and personal attributes that allowed him to be an effective advocate in a country that routinely punishes government opposition.

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Fast-Tracking Justice: India’s New(ish) Strategy to Curb Corruption

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How do you deal with the problem of more than 6,000 corruption cases and nearly 5,000 criminal cases pending against politicians, some dating back almost 40 years? The answer, according to India’s Supreme Court: put a one-year time limit on cases involving politicians.

This decision, which was issued this past September in a “public interest litigation” case, seeks to increase public confidence in the judicial process and to make the legal system more effective in addressing India’s pervasive political corruption. Corrupt politicians in India are typically able to slow down legitimate prosecutions, for example by exploiting India’s complex court filing procedures, leading the cases to drag on for years or even decades. This delay increases the chances that key evidence will be lost or obscured—a process that corrupt defendants can and do help along by bribing, threatening, or even killing witnesses. By preventing cases from ending in conviction, corrupt politicians have created a de facto culture of impunity. The problem is particularly acute in the current parliament, where 43% of new members elected in 2019 had pending criminal charges. The Supreme Court’s order seeks to address this and other problems.

This isn’t the first time that the Supreme Court has ordered fast-tracking. The Supreme Court previously called for time-bound trials against politicians back in 2011, during the tenure of the corruption-riddled Congress Party, yet the case backlog remained. There is reason to believe, though, that this time is different. The current ruling Bharatiya Janata Party (BJP) swept into power in part by making anticorruption efforts a priority, and there are signs that the BJP’s general commitment to anticorruption may be having a meaningful impact in the context of the one-year order. Following the Supreme Court’s ruling, the highest courts in (most) states submitted action plans for dispatching cases, and India’s Solicitor General said that he is “100% serious” about completing trials within a year. Despite certain serious challenges to effective implementation of this new fast-tracking program, India’s renewed commitment to moving the wheels of justice more quickly could prove powerful in holding corrupt politicians accountable and restoring public confidence in the judiciary.

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