Author Archives: Richard Messick

International Anticorruption Academy Summer Program September 5 – 11

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This year’s summer program of the International Anticorruption Academy will be delivered online September 5 through September 11.  University of Gothenburg Bo Rothstein, SOAS Professor Mushtaq Khan, and OECD Antibribery Working Group Chair Drago Kos are among the authorities on corruption-related topics who will speak.  Yours truly will moderate a panel discussion on preventing corruption in infrastructure.  Participants not able to attend all live sessions will be have access to video recordings.

Details on the program and how to register here

Suspended EFCC Chair Answers Anonymous Charges

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Opponents of Ibrahim Magu, suspended chair of Nigeria’s powerful anticorruption agency the Economic and Financial Crimes Commission, are doing their best to convict him of corruption in the court of public opinion.  While Chairman Magu patiently waits for a chance to clear his name before a special panel investigating charges levelled against him by Abubakar Malami, Minister of Justice and Attorney-General, stories of his supposed corruption appear daily in Nigeria’s raucous media. In response, his counsel Wasab Shittu has begun responding.  Below are excerpts from his July 26 letter.

Alleged Questions Over [the Chairman’s] Asset Declaration.

Our client has NEVER been confronted with any such allegations purportedly arising from the Panel’s proceedings. The story attributed to the panel, which has become a recurring decimal, is a dangerous attempt to discredit the work of the honorable panel.

Funds recovered from indebted NNPC marketers for the NNPC.

Contrary to the misleading media reports, EFCC under our client’s watch NEVER misappropriated any funds recovered for NNPC [Nigeria National Petroleum Corporation]. The truth of the matter is that well over N329billion recovered by EFCC under our client’s watch was remitted directly in10 NNPC dedicated accounts via REMITTA under a special arrangement endorsed by NNPC, EFCC and the affected NNPC’s indebted marketers.

Suspended Nigerian Anticorruption Agency Head Rebuts Charges

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As this blog has reported, Ibrahim Magu, the Acting Chair of Nigeria’s Economic and Financial Crime Commission, was detained July 7 by the state security service on vague charges involving corruption and misfeasance in office.  Since then, in what would appear to be an orchestrated campaign to discredit him, the Nigerian press has been awash with allegations of Magu’s wrongdoing.  They range from a claim that he secretly owns property in Dubai to charges he has embezzled millions from the Commission to an assertion he has paid off Nigeria’s sitting Vice President.

A point-by-point rebuttal of the allegations, issued by Mr. Magu’s counsel Wahab Shittu, is below.  An interview with Mr. Shittu on the public affairs program “Law Weekly,” is here, and a discussion of the issues raised by Magu’s treatment and their implications for Nigeria’s fight against corruption is here.

Many Nigerians fear that the real reason Magu was detained and subsequently suspended from office is that he has been far too effective a corruption hunter (examples here and here). Let’s hope the Presidentially appointed panel investigating Magu acts promptly, fairly, and decisively.  Nigeria needs an strong, effective Economic and Financial Crimes Commission to fulfill President Buhari’s pledge to fight corruption.

THE CHAIRMAN                                                                                                                               The Presidential Investigation Committee on The Alleged Mismanagement Of Economic and Financial Crimes Commission (EFCC)                                                                               Federal Government Recovered Assets and Finances From May 2015 to May 2020.

Attention: Hon Justice Isa Ayo Salami (Rtd)

Gentlemen:

PUBLICATIONS PREJUDICIAL TO THE PROCEEDINGS OF THIS HONOURABLE PANEL Continue reading →

Undermining President Buhari’s Fight Against Corruption? Alarming News out of Nigeria

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Nigerian media have been filled with conflicting accounts (here and here) about whether Ibrahim Magu, Acting Chairman of the Economic and Financial Crimes Commission, was himself arrested for corruption Tuesday.  A press release issued by a member of the Presidential Advisory Committee Against Corruption meant to clarify the situation reveals highly disturbing ongoing machinations within the Nigerian government over President Buhari’s effort to curb corruption.  It is reprinted below. UPDATE: Since its appearance, other advisory committee members have said they do not endorse it.

Press Release: Professor Femi Odekunle, Member, Presidential Advisory Committee Against Corruption.

This is a preliminary reaction of the Presidential Advisory Committee Against Corruption (PACAC) to the alleged ‘arrest’ of Ibrahim Magu, Acting Chairman the Economic Financial Crimes Commission (EFCC). Of course, the real information reaching us is that he was only invited to appear before a Panel set up not long ago concerning some alleged memo by Malami, Attorney General and Minister of Justice, regarding some alleged malfeasance by Magu, along with nominations for his replacement.

It was just that those sent to invite him for whatever reasons best known to them invited some press along and made it look an arrest. That mischief has been confirmed by some apparent afterthought denial by the DSS [the Department of State Services, the domestic intelligence agency] that it was not an arrest. While PACAC has not had a formal meeting on this development, I have discussed with the Chairman and some other members and the following can be considered as PACAC’s preliminary reaction to this development.

The alleged originating Malami memo, up to the current “arrest “ seems an outcome of power-play by power blocs in the corridors of power in which Malami appears to be an arrow-head or major agent of a power bloc that is not really interested in, or in support of, Buhari’s anti-corruption fight.

  1. One can recall the earlier non-confirmation experience of Magu by the 8th Assembly, orchestrated by a power bloc and supported by the DSS ‘Security’ reports.
  2. One can also note the non-resubmission of Magu for confirmation since May 2019 despite the apparent willingness of the 9th Assembly to consider it this time around.
  3. Furthermore, one must take cognisance of the alleged memo referred to earlier i.e by Malami concerning alleged corrupt practices by Magu, along with his own nominations for Magu’s replacement.
  4. Again, we cannot forget Malami’s demand of certain high-profile case files from Magu which the latter has been resisting.

Continue reading →

Canadian Legislation to Permit Use of Stolen Assets for Humanitarian Relief

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Ontario Senator Ratna Omidvar has introduced legislation to allow the Canadian government to use frozen assets for humanitarian end. The Frozen Assets Repurposing Act (Loi sur la réaffectation des biens bloqués) would authorize the Attorney General or a designee to request the court where an asset is frozen to seize it. If after a hearing the court is satisfied on the balance of probabilities that the asset is “associated with a foreign national who is responsible for or complicit in” corruption or human rights violations, the asset would be liquidated and the proceeds paid into the court. The court may then distribute the funds to any person, organization, or foreign state for a “just and appropriate” purpose.

The Senator’s bill solves a problem both Canada and the European Union faced in the wake of the Arab Spring.  Canada’s federal government and EU executive both had the power to freeze assets where there was evidence that they were obtained through corruption. But the law allowed them to do no more.  The laws of both assumed the governments from which the assets had been stolen would initiate return proceedings in accordance with chapter V of UNCAC.  But thanks to some combination of a lack of capacity and political wherewithal, successor governments in Egypt, Libya, Tunisia, and Yemen did not. The freezes either ended and the funds went back to the crooked leader or they remain frozen indefinitely.

Although the legislation leaves it to the court to decide how to use the confiscated funds, Senator Omidvar’s bill explicitly states that consideration be given to helping foreign states accommodate refuges. She suggests for example that the frozen funds of Venezuela’s corrupt rulers could be distributed to Colombia and other neighboring countries to alleviate the suffering of Venezuelans who have sought refuge in them.

The confiscation process follows that in the U.K.’s Unexplained Wealth Order law. The holder of the asset would be given the opportunity to show he or she had obtained it through lawful means.  Only if the holder failed to convince the court that it was would confiscation follow.

The legislation was inspired by this 2018 World Refugee Council paper.  The Senator’s “Make Corrupt Foreign Officials Pay,” an article in the online journal Policy Options Politique, makes a strong case for its enactment.  The arguments are not Canada-specific. Perhaps legislators in other countries where the corrupt hide their money will be inspired to copy her bill?  The text is here.

Australian Lawyers and Real Estate Agents: Kleptocrats’ Best Friends?

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Government officials who steal “vast quantities” of their citizens’ money need help hiding the loot.  The first generation of kleptocrats — the Ferdinand Marcoses, Mobutu Sese Sekos, and Sani Abachas of the world – showed that the preferred way is to retain someone to surreptitiously move the money into a safe haven abroad and then invest it in assets that cannot be traced back to them.  The anticorruption community calls these accomplices to grand corruption “enablers,” for they enable corrupt officials to hide their money.

The international community has begun cracking down on this professional class of crooks.  The primary means has been through making them subject to domestic anti-money laws.  Just as the laws of virtually all countries require banks and other financial institutions to take particular care (“enhanced due diligence”) before accepting as a customer current or former senior government officials or their family members or close associates and to report any suspicious transaction these “politically exposed persons” conduct, the Financial Action Task Force recommendations 22, 23, and 28 require the same from lawyers, accountants, real estate agents and others with the professional skills required to hide stolen assets. FATF has no power to compel countries to transpose these recommendations into domestic law.  It relies instead on the peer pressure generated by regular, highly publicized reports on individual nation’s compliance with them.

That system has now ground to a halt. According to the Financial Review, the reason is fierce opposition from Australian lawyers and real estate agents to what a FATF review of Australian compliance with the anti-money laundering recommendations would reveal. For 13 years the two have blocked the extension of the Australian anti-money laundering rules to their activities; last November a scheduled FATF review was about to finally call them out.  It was then suddenly cancelled. The only explanation given was that FATF had decided “to temporarily pause the start of all scheduled follow-up assessments pending the outcomes of the strategic review of FATF currently underway.”  Although FATF acknowledged discussing the review at its February 2020 meeting, no details about what the review would cover or when it would be completed was provided.  In the meantime, professions in the United States, Canada, and other nations (here, here, and here) who oppose extending anti-money laundering rules to their activities can breathe easier.  So can kleptocrats wanting to tap their expertise in hiding money.

Review of Søreide and Makinwa “Negotiated Settlements in Bribery Cases: A Principled Approach”

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The resolution of foreign bribery cases through some type of out-of-court agreement has spread from the United States to other OECD nations.  The latest figures show that close to 80 percent of foreign bribery prosecutions by OECD nations have been settled short of a full trial on the merits.  Settlements free prosecutors to pursue additional violations, but there is the ever-present risk the defendant will get off too easy, that the settlement terms will not deter the defendant or others from continuing to bribe officials of a foreign government.

The OECD’s Working Group on Bribery in International Business Transactions is now developing standards to ensure that settlements will provide the “effective, proportionate, and dissuasive criminal penalties” the OECD Antibribery Convention mandates. As it proceeds, it will find Negotiated Settlements in Bribery Cases: A Principled Approach, a new volume from Elgar edited by anticorruption scholars Tina Søreide and Abiola Makinwa, an invaluable guide.  In 12 chapters, the cross-disciplinary, multinational group of experts the editors assembled review the use of settlements in the United States, the experience of other nations and the World Bank with settlements, ways to judge whether a settlement serves the public interest, and recommendations for gauging whether a particular settlement passes the public interest test. Continue reading →

Barring Corrupt Officials from Entering the United States: A Guide to the Process

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Since 2004 it has been American policy to deny entry into the United States of corrupt foreign officials and their immediate families. President George W.  Bush initiated the policy by presidential order, and in 2008 Congress added its voice, enacting legislation barring “foreign kleptocrats involved in the extraction of natural resources” from entering the United States.  Beginning in 2012, the Congressional ban was extended to include all those involved in “significant corruption,” and in 2014 the provision was expanded again to cover foreign officials involved in “a gross violation of human rights.” The following year Congress clarified that designations may be made publicly or privately.

The first public designation was made in 2018 (Albanian judge and prosecutor Adriatik Llalla), and since then more than 150 individuals from over 30 countries have been publicly barred from entry — either for corruption or human rights violations.  Although the State Department web site does not keep a running list of those who have been barred, the NGO Human Rights First does. A spreadsheet available on its website can be sorted by country, crime, date, and other fields and includes links to each State Department sanctions announcement. It is updated whenever new sanctions are announced

The Department encourage civil society activists, foreign diplomats, and others with information relevant to the designation process to contact it. The best way is through its personnel in the field as designations typically arise from recommendations made by U.S. embassy staff.

Two excellent descriptions and discussions of the visa denial policy by analysts at the Library of Congress’ Congressional Research Service are here and here.

The Human Right First spreadsheet, “U.S. Government Public Section 7031(c) Sanctions Designations to Date,” can be accessed here.

GAB contributor Daniel Binette’s recommendations for greater clarity in how visa denial decisions are made is here.

Where the Real Blame for Letting Bridgegate Defendants Off Lies: Part II — the Congress

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Anticorruption advocates roundly condemned the Supreme Court for its May 7 Bridgegate decision overturning two New Jersey officials’ corruption convictions for conduct even their lawyer admits was wrong (examples here, here, and here).  But as explained in a previous post on Bridgegate, so named because the case involved closing bridge entry ramps to create traffic jams, the Court is not to blame for the result.  The immediate cause was Bridgegate prosecutors pushing beyond the limits the Court has ruled current law sets on their power to police state and local corruption.

It is Congress, though, that bears the lion’s share of the blame for the outcome. Congress needs to clarify when state and local officials can be prosecuted under federal law for corruption.  Until it does, more Bridgegates, cases where the Court rebuffs federal prosecutors’ expansive view of their power to prosecute state and local corruption, are in store.  As with Bridgegate, the result will be that corrupt officials get off scot free while the American public is left to question their government’s commitment to fighting corruption. Continue reading →

Where the Real Blame for Letting Bridgegate Defendants Off Lies: Part I

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The Supreme Court continues to bear the blame for two political operatives getting off scot free for an admitted blatant abuse of power: creating nightmarish traffic jams for residents of a small New Jersey town because its mayor had not endorsed their boss’ reelection as governor.  Though the record showed the stunt endangered the lives of some and inconvenienced thousands and their lawyer admitted it was an abuse their power as state officials to cause the jams, the Court acquitted them on all charges.  Its decision in the Bridgegate case, so named because the traffic jams were created by blocking two lanes of the bridge the residents used to commute to New York City, is indeed the immediate reason defendants escaped sanction.

But that ruling was the inevitable consequence of earlier decisions by the other branches of government.  For decades Congress has ignored the Court’s warning that the hodgepodge of federal laws used to prosecute state and local officials for corruption is Constitutionally infirm.  And for decades, and despite some spectacular earlier reversals by the Court, the Executive branch has continued to rely on these statutes to prosecute state and local corruption.

Those genuinely interested in fighting corruption need to stop denouncing the Court and focus their energies instead on these two branches of government.  Below is what they should demand of the Executive.  Part II of this post will explain what they should demand of Congress. Continue reading →