Day Two of the Trial of Teodorin Obiang

GAB is pleased to publish this account of the 2nd day of the trial of Equatorial Guinean Vice President Teodorin Obiang by Shirley Pouget and Ken Hurwitiz of the Open Society Justice Initiative

The defense suffered several significant setbacks at the second day of Equatorial Guinean Vice President Obiang’s trial for theft of public funds, money laundering, and other charges that together amount to kleptocracy.  As GAB earlier reported, Obiang’s lawyers sought to delay the case on procedural grounds and to block Equatorial Guinean citizens from, as French law permits, participating in the prosecution.  The court refused both requests.

Even worse for Obiang, the court displayed a detailed command of the allegations against him along with a determination to see they are presented at trial. Accusations that have appeared in the media, civil society publications, or elsewhere will now be tested in a formal, judicial proceeding.  A finding that they are true, that Obiang did indeed rob the citizens of Equatorial Guinea blind, cannot do anything but embolden courts elsewhere to pursue similar cases while confirming to the world the regime’s pariah status. Continue reading

The Trial of Suspected Kleptocrat Teodorin Obiang: Report on Day One

GAB is pleased to publish this account of the first day of the Obiang trial by Shirley Pouget, a French lawyer observing the proceedings on behalf of the Open Society Justice Initiative

The worldwide fight against grand corruption took a giant stride forward Monday June 19 with First Vice President of Equatorial Guinea Teodoro Nguema Obiang Mangue standing trial for corruptly diverting millions from the national treasury.  Known to cronies as Teodorin, the case appears to be the first ever where a high-level official, while in office, is called to account for grand corruption before a foreign court. The precedent setting case, the culmination of a decade of determined struggle by French and Equatorial Guinean civil society, is being heard before the Tribunal Correctionnel in Paris.

As the trial opened, the courtroom overflowed with journalists, civil society representatives, and Equatorial Guineans in exile: we were all there to see if indeed a powerful politician whose corrupt activities have left his nation in penury would be held to account.  The three judges hearing the case, all women, took their seats at 1:30. The presiding judge opened by recalling that the accused was before the court on charges of misappropriation of public funds, complicity in the misappropriation of public funds, misuse of corporate assets, complicity in the misuse of corporate assets, and the concealment of each of these offences.  She explained that the court had jurisdiction because each offense, or an element of each, was committed in France.  She then expressed concern that defense counsel had only provided answers to the charges a few days before the trial began.

The defense launched into a series of objections to the commencement of the trial that consumed the entire afternoon hearing.  Teodorin’s high-priced lawyers argued that 1) the case should be stayed pending a final decision by the International Court of Justice in a case between France and Equatorial Guinea, 2) the magistrates’ decision to refer the accused for trial was illegal, and 3) a coalition of Equatorial Guineans should not be permitted to participate in the case as a civil party.  They also raised an unexpected claim based on a highly technical reading of the charging document.    Continue reading

At Last: A Kleptocrat Faces Justice

This Monday, June 19, a case against Equatorial Guinean First Vice President Teodoro Nguema Obiang Mangue for looting the nation’s oil wealth opens in a Parisian criminal court. In partnership with the Open Society Foundations Justice Initiative, GAB will provide readers with regular reports on the case’s progress.  Although the Vice President is unlikely to appear in person, the case nonetheless is an important milestone in the world wide struggle to bring to justice rulers who rob their citizens on a massive scale.  It marks the first time, to GAB’s knowledge, a sitting kleptocrat has been called to account.

The case, one of several collectively known as “bien mal acquis” or “ill-gotten goods,” has gone through several twists and turns.  It is a tribute to the hard work, persistence, and dedication of CCFD-Terre Solidaire, Sherpa, TI-France and other individuals and NGOs that it is now finally set for trial.  Vice President Obiang could be sentenced to up to 10 years’ in prison and fined millions of euros if convicted.  While he would surely remain holed up in Equatorial Guinea to duck prison, conviction would likely carry an order confiscating all property he owns located in France, which today is known to include a Parisian mansion valued at 107 million euros along with a collection of Ferraris, Maseratis, and other luxury cars like worth over five million eruos.

The French case is not Obiang’s first brush with the law.  In October 2014, to settle a U.S. case based on his kleptocratic ways, he forfeited a mansion in California and other property worth $30 million.  Obiang is also under investigation in a number of other jurisdictions.

Monday’s hearing begins at 1:30, Paris time.  For those fortunate enough to be in Paris, additional hearings are scheduled for 9:00 am, June 21; 1:30, June 22; 1:30 pm, June 26; 1:30, June 28; 9:00, June 29; 1:30, July 3; 9:00 July 5; and 1:30 July 6.  For those who are not, GAB is the next best alternative.

Fighting Procurement Corruption: the Essential Role of Bid Challenge Systems

Ensuring firms that loose the competition for a government contract can challenge the result is a critical part of the fight against corruption in public procurement.  A losing bidder will have lost the chance to make a profit and will have invested time and money in preparing its bid.  It thus has not only a strong motive for contesting a decision it believes tainted by corruption but the expertise to do so.  Bid challenge systems complement procurement oversight by civil society.  Indeed, they may even be a more powerful tool.  Whereas civil society monitoring typically relies on public-spirited volunteers unfamiliar with the technical aspects of the procurement, bid challenge systems harness firms’ self-interest and technical knowledge in service of ferreting out procurement corruption.

Transparency International’s 2014 volume on combating procurement corruption and the OECD’s 2016 procurement integrity handbook both note the importance of bid challenge systems but offer little guidance on what makes for an effective system.  Here are five questions anticorruption advocates can ask to assess the effectiveness of their nation’s bid challenge system: Continue reading

U.S. to Honor Corruption Fighters from Afghanistan, Angola, Guatemala, Malaysia, and Ukraine

Afghanistan NGO leader Khalil Parsa, Angolan journalist Rafael Marques de Morais, Guatemalan judge Claudia Escobar, Malaysian civil society activist Cynthia Gabriel, and Ukrainian investigative journalist Denys Bihus will share the 2017 Democracy Award for their work promoting democracy in their countries.  Bestowed annually by the National Endowment for Democracy, the U.S. democracy promotion agency, the ceremony will be held June 7 at the U.S. Capitol.  Republican House of Representatives Speaker Paul Ryan and the House Democratic Leader Nancy Pelosi will both speak.

This year’s award is significant for three reasons.  In the wake of concerns Trump Administration rhetoric has raised about America’s commitment to human rights and democracy, Speaker Ryan and Leader Pelosi’s participation is a reminder that a strong, bipartisan consensus on these basic, universal values remains deeply embedded in U.S. political culture.  Second is the recognition by the National Endowment, perhaps the world’s leading advocate of democracy, that the fight against corruption is an essential element in building a democratic state.  Finally, the award is one more sign that those fighting corruption at home are not alone, that the international community supports them and stands with them.

More on the ceremony, biographies of each recipient, and the National Endowment’s democracy promotion work here.

Venezuelans Out Kleptocrats’ Kids

Those cursed to live in a country where leaders are stealing the nation’s resources wholesale are rarely able to stop them.  Calling the police, complaining to the prosecutor, or appealing to the legislature is pointless: in a kleptocracy the thieves control the machinery of the state.  Speaking out is futile.  Those who do are quickly silenced — imprisoned if they not become the victim of state-sponsored assassination.

So it is particularly welcome to report that the citizens of Venezuela, the latest nation to become victim of massive, “grand” corruption by its leaders, recently hit upon a way to strike back. Even better is how they are doing it: using the social media posts of the kleptocrats’ kids. The Twitter account VVsincensura (“Venezuelans uncensored”) scours the internet collecting posts by the children of Venezuela’s kleptocrats showing them living the high life in Paris, Hong Kong, Sydney, and the like while the nation sinks ever deeper into a state of penury.  From videos of the Caracas mayor’s daughter surfing in Australia to pictures of a former state official’s offspring helicoptering around the Middle East, VVsincensura regularly, indeed sometimes hourly, tweets out evidence of how well one’s kids can vacation, dine, and tour when the government picks up the tab.  Particularly galling are photos of an ex-Minister of Health’s children sightseeing in China while the country experiences a medical emergency because it has no money to pay for basic medicines and hospital supplies.

Venezuela’s kleptocrats are yelping over the outing of their kids (example here).  More significantly, the steady stream of snapshots showing them, drink in hand, languishing by a fancy pool or on white sands beach while the mass of Venezuelans scrounge for life’s basic necessities is starting to have an impact — both in Venezuela and abroad.

Within in Venezuela VVsincensura has stripped the last shred of legitimacy from the thieves ruling the country.  Their claim to power is that they speak for Venezuela’s poor.  But as more and more pictures of their kids in private jets, on luxurious beaches, or in five star restaurants circulate, that claim has become a dark national joke.  It has also pumped new life to Venezuela’s beleaguered domestic opposition.  The only thing now keeping the kleptocrats in power is the security forces, and one has to ask how many pictures of generals’ sons and daughters living it up in Madrid, Buenos Aires, and Sao Paulo will it take before front-line soldiers begin deserting en masse.

Outside Venezuela the vulgar display of wealth by kids of kleptocrats has become so revolting that it has begun to spark action. At this writing some 30,000 Australians have signed a petition demanding that their government revoke the student visa of Lucía Rodríguez, daughter of Caracas’ mayor and niece of the Foreign Minister.  Rodríguez, ostensibly a student at a pricey Sydney University (tuition $18,000), is shown riding the waves off a Sydney beach in one VVSincensura post and enjoying a lifestyle far removed from that of an ordinary student in others. In the meantime, her father earns less than a $1,000 a year as mayor while preaching the virtues of an austere life to his constituents.

The Australian government should heed its citizens’ plea and send Rodríguez home, and that civil society in other nations hosting the kids of Venezuela’s kleptocrats should file similar petitions.  Denying kleptocrats the ability to send their kids abroad would remove one incentive for them to rob their nation blind.  More importantly, perhaps if the kids are penned up in Venezuela they will begin to realize just how hard life is for the great majority and how much responsibility their parents bear for making it so. Who knows, a few uncomfortable conversations around the family dinner table might prompt some of the thieves to go straight? For if a parent craves anything, it is their child’s love and respect.

While a single Twitter account might seem a feeble weapon to fight kleptocracy, VVSincensura shows that this is not so.  That when aimed at the right target, it can be a powerful weapon for combatting grand corruption. The ostentatious, revolting display of wealth by kleptocrats’ kids VVSincensura features reveals in a dramatic way the evil of grand corruption.  It is a tactic deserves widespread emulation — by citizens of other kleptocracies and anticorruption activists everywhere.

Ceiling Prices: A Second Best Method for Attacking Bid Rigging

The procurement laws of all countries provide that with a few, narrowly drawn exceptions public contracts are to be awarded on the basis competition.  As the drafters of the UN model procurement law explain, the reason is straightforward. A competitive procurement gives all those seeking the government’s business an equal chance to win the contract while at the same time maximizing the chance that government will receive quality goods, services, or civil works at the lowest price.

The problem comes when would-be suppliers do not compete for government’s business.  When instead of each one preparing its bid independently, based on what price the firm can charge and still make a reasonable profit, the bidders sit together and agree which one will “win” the contract and at what price, a price that can sometimes be twice what it would have been were there competition.

How can a government reap the benefits of competition when bidders have rigged the bid? The answer is that it cannot.  At least not immediately.  It can, as both the U.S. Department of Justice and the OECD recommend, institute procedures that make it harder for firms to collude, and it can, again as both these agencies regularly urge, vigorously enforce laws that outlaw bid rigging.  But these measures take time to have an effect; in the meantime, a government cannot halt all procurements.  It still needs to buy computers, desks, and other goods, to contract with cleaning, fumigation, and other service providers, and it must continue to build and repair roads, damns, and other civil works.

So in the face of collusion or cartel-like behavior by its suppliers, is government powerless in the short-run?  Must it accept whatever price the bid riggers offer? No matter how high it might be? Continue reading