Monthly Archives: October 2021

Time-Sensitive Announcement: Call for Civil Society Organization To Join Letter on Corporate Transparency Act Implementation

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Today’s announcement is meant specifically for readers affiliated with civil society organizations that work on anticorruption, anti-money laundering, and related issues (especially, though not exclusively, in the United States). As most of you are likely aware, last year the United States enacted the Corporate Transparency Act (CTA), and the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is in the process of developing rules to implement that act. The formal period for public comment on the proposed rules has already passed, but in light of the recent revelations concerning the Pandora Papers–which highlighted, among other things, how trusts have been abused to hide illicit assets–a coalition of civil society organizations, led by Transparency International’s US chapter, is submitting a letter to FinCEN urging the adoption of appropriately vigorous rules. In particular, the letter urges FinCEN (and here I am quoting directly from the letter) to:

  • Maintain the comprehensive definition of “beneficial owner” expressly included in the CTA;
  • Provide for broad coverage of the types of entities required to register, including, but not limited to, all non-exempted trusts;
  • Limit the interpretations of the exemptions, as best as possible, to include only those that file beneficial ownership information elsewhere with authorities or are truly low risk for money laundering, terrorist financing, and other harms; and
  • Allow for timely and complete access to beneficial ownership information for all law enforcement and those with legal obligations to protect our financial system.

The deadline for signing onto the letter is tomorrow, October 13th. As noted above, the letter is intended to be from a coalition of organizations, rather than individuals, but if any of you out there are affiliated with civil society organizations that have not yet signed onto the letter, I urge you to do so.

In Pari Delicto & Parens Patriae: Latin All Corruption Fighters Should Know

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In pari delicto, Latin for “of equal fault,” is a legal doctrine that prevented the government that succeeded Saddam Hussein’s from recovering hundreds of millions of dollars in damages from those involved in Saddam and cronies’ corruption. It has deterred other governments taking power after a kleptocrat’s fall from attempting to recover damages as well. Parens patriae, Latin for another legal doctrine, is one way around the result in pari delicto dictates in kleptocracy cases.

Corruption hunters thus have good reason to learn Latin. At least enough to ensure that those who profit from a kleptocrat’s reign don’t escape reckoning when there is a regime change.

The barrier in pari delicto raises to a government recovering damages from a kleptocrat’s accomplices was first revealed in a suit the post-Saddam government filed in 2008.

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New Podcast Episode, Featuring Fernanda Odilla and Anwesha Chakraborty

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, my colleague Nils Köbis interviews Fernanda Odilla and Anwesha Chakraborty, two researchers studying how technology can be used to assist bottom-up anticorruption efforts–particularly, though not exclusively, in Brazil and India. The interview covers a range of initiatives in this category, discussing their strengths, limitations, and future possibilities. 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.

Current and Former Mozambican Presidents, Other Higher Ups “Cleared” in Hidden Debt Scandal

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Last week the presiding judge in Mozambique’s hidden debt trial made it plain that the country’s current and former presidents and other senior members of the country’s ruling party would not have to answer for their role in the hidden scandal. The massive corruption scheme has cost the impoverished nation billions and ended any hope millions of its citizens could escape a life of abject poverty.

Nineteen middle-level officials and accomplices are on trial in Maputo for accepting bribes to approve $2.1 billion in contracts to the Middle East shipbuilding company Privinvest and then taking more bribes to have the government secretly borrow the money to finance the projects. The economy tanked and poverty rates skyrocketed when the secret loans were revealed.

As he was finishing his testimony last Thursday, the General Director of the State Intelligence and Security Services, the highest ranking official on trial, complained to trial judge Efigénio Baptista, “I am here alone.” He said he was the only member of the Joint Command and the Operation Command, the inter-agency groups that cooked up the scheme, to be prosecuted.

“The former Minister of National Defense, Filipe Nyusi, and the former Minister of the Interior, Alberto Mondlane, should be answering. They were also part of the Joint Command.”

The judge explained that Nyusi, now the country’s president, and Mondlane, governor of an important province, were not charged because the prosecution had no evidence they had taken bribes.  He also helpfully went on to add that for the same reason Armando Guebuza, president when the contracts were let and the loans taken out, was not on trial. 

The above comes from the Centro para Democracia e Desenvolvimento reports on the trial. This one, recounting the state security director’s testimony, also helpfully reminded readers of the testimony of Jean Boustani at a 2018 trial in New York. There the Privinvest senior executive provided details about the bribes Privinvest paid Nyusi, Guebuza, and other officials not among the 19 on trial in Mozambique. Perhaps Judge Baptista and the Mozambican prosecutor have overlooked something?