Category Archives: Commentary

Good News about the Fight Against Corruption: International Collaboration in Malawi

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Malawi’s Platform for Investigative Journalism reports that “the man widely accused of orchestrating one of the most brazen corruption schemes in Malawi’s history is now officially in the dock” (here).

As the Continent recounts (here), British-Malawian businessman Zuneth Sattar was indicted June 2 in the United Kingdom on 18 counts of bribery. The charging documents claim that in return for a raft of state contracts he bribed numerous high-ranking Malawian officials. Named in the documents are: a previous Vice President, the late Saulos Chilima; President Lazarus Chakwera’s chief of staff, Prince Kapondamgaga; former Malawi Police Inspector General George Kainja; former Anti-Corruption Bureau (ACB) Director General and Solicitor General Reyneck Matemba; and Brigadier Dan Kuwali, a law professor and commandant at the Malawi Defence Force College.

The charges show how critical transnational cooperation can be when it comes to nailing “big fish.”  They are the result of a several year collaboration between the UK’s National Crime Agency and Malawi’s Anti-Corruption Bureau (ACB).

The case also shows that cross-border cooperation is critical not only when it comes to rooting out the facts.

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Good News from Argentina: Web of Judicial Corruption Exposed

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Judge Marcelo Bailaque, a senior federal magistrate based in Rosario, has been arrested for his role in a complex corruption scheme that allowed drug traffickers and money launders to avoid prosecution.

What makes the arrest especially good news is that Rosario, a river port on the route between cocaine-producing Peru and Bolivia and customers in Europe, has been dubbed Argentina’s first “narcocity,” with gangland violence regularly leading to the deaths of innocents (here). His arrest is a critical step in dismantling the gangs and bringing peace and prosperity to the beautiful, colonial-era city.

Although the immunity Bailaque enjoys as a federal judge may slow the criminal case, the arrest prompted the immediate opening of a disciplinary one before the governing body of the judiciary (the Consejo de la Magistratura). It is now proceeding in parallel with the criminal investigation.

Bailaque was snared as part of a larger investigation led by the Rosario office of Argentina’s Procuraduría de Criminalidad Económica y Lavado de Activos. It found that Carlos Vaudagna, a now former regional director of the tax agency operated as an informal broker between individuals under criminal investigation and key members of the judiciary. Using his position and influence, Vaudagna secured favorable treatment for the suspects in return for bribes or other benefits, intervening directly or through intermediaries to obstruct investigations, delay proceedings, and influence judicial decisions. His conduct exposed a broader structure of collusion between segments of the judiciary and organized economic crime. Judge Bailaque is charged with playing a central role in the criminal scheme, enabling or tolerating illicit practices from his position on the federal bench.

This outcome represents a crucial milestone, not only in the pursuit of accountability in this case, but in the broader fight against corruption within the judiciary. Progress would not have been possible without the collaborative efforts of multiple agencies and the strong institutional backing for prosecutorial independence in Argentina.

For Spanish readers (and Google translate users) more on the investigation follows.

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Fighting Grand Corruption: Naomi Roht-Arriaza’s Indispensable Guide to Combatting Its Scourge

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The literature on grand corruption, a/k/a kleptocracy or state capture, continues to expand at an ever-increasing rate.

Investigative exposes, think tank and NGO policy papers, academic books and articles, court cases and legal commentaries, and yes, blogs like this one make it hard for full-time students of the phenomenon, let alone policymakers, journalists and activists, to stay abreast of the learning this vast outpouring of thinking is producing.  

Thanks to University of California Law Professor Naomi Roht-Arriaza‘s new book, what we know about grand corruption, what can be done to curb it, and how to make its victims whole is now available in a single, readable, useful volume.

The title – Fighting Grand Corruption: Transnational and Human Rights Approaches in Latin America and Beyond – advertises two of its most important contributions.

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Trump Blares Profits, Eliciting Barely a Peep

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That was the headline on the lead story in the May 26 New York Times.

The author, the chief White House correspondent for The New York Times and one of Washington’s most respected journalists, reports the growing view that the Trump Administration’s corruption represents “the most brazen use of government office in American history.” In support he cites anticorruption guru and GAB favorite Michael Johnston who told him–

I’ve been watching and writing about corruption for 50 years, and my head is still spinning

To quote a guru on another subject (revolution — V. Lenin), the question is now: What is to Done?

Great Resource for Journalists and Anticorruption Activists

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UNISHKA Research Service, a worldwide alliance dedicated to fostering ethics and integrity in government, business, and society, is developing directories showing for each country where to find property records, business registrations, and other information on who holds what assets. The project is adding countries at a rate of 1-2 per week.

A screenshot of the first page of the Qatar directory is below.  Link to the full page here.

Belgian and Uzbek Governments Profit from Termination of DoJ’s Kleptocracy Unit

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Central Asia Due Diligence and the Uzbek Forum for Human Rights have identified the latest fallout from the Trump Administration’s destruction of American institutions devoted to fighting global corruption. The governments of Belgium and Uzbekistan have each pocketed $108 million in stolen assets that should have gone to the people of Uzbekistan.

In this just released paper, the two human rights NGOs explain how the demise of the Department of Justice’s Kleptocracy Asset Recovery Initiative allowed the two governments to ignore provisions in the UN Convention Against Corruption and the principles of the Global Forum on Asset Recovery that together bar assets stolen by a corrupt official from being kept by the government of the country where the official stashed them or returned to the official’s corrupt cronies.

Lawyers for the Initiative had designed a sophisticated process (details here) to see the $216 million in bribes to former Uzbek first daughter Gulnara Karimova found in Belgian banks DoJ would go to the UN trust fund overseeing development programs in Uzbekistan. With the Initiative’s demise, the Belgian and Uzbek governments apparently saw no reason they should not divvy up the money between them.

So thanks to the Trump Administration, Belgium, one of the world’s wealthiest countries, is now $108 million wealthier, and Uzbek’s leaders, several Gulnara’s accomplices, now have $108 million to spend keeping themselves in power. Meanwhile, the citizens of Uzbekistan, GDP per capita $3,500, scrape by.

So That’s Why the Kleptocracy Asset Recovery Initiative Was Abolished

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Thanks to Alexis Loeb’s March 26 Lawfare post, another Trump Administration attack on the global effort to curb corruption has been revealed. Buried in Attorney General Bondi’s February 5 Memorandum making the elimination of drug cartels and transnational criminal organizations the Justice Department’s number one priority, she reports, is an order disbanding the Department’s Kleptocracy Asset Recovery Initiative.

Loeb does a fine job of explaining what a loss its dissolution will be to the international fight against corruption, recounting its efforts to help nations around the world battle kleptocracy. Among its successes: Initiative’s lawyers forced notorious kleptocrat Nguema Obiang, Equatorial Guinea’s Vice President, to forfeit nearly $30 million in assets, and their efforts resulted in the return of millions stolen by Nigerian dictator Sani Abacha and former Uzbekistan “first daughter” Gulnara Karimova to their countries. The blockbuster was 1 Malaysia Development Berhad (1MDB). With the Initiative’s assistance, Malaysia has so far recovered $6.5 billion in stolen assets from the thieves (here). Indeed, Jeff Sessions, Trump’s first Attorney General, called the 1MDB scandal “kleptocracy at its worst,” and lauded the help the Initiative provided Malaysia’s government (here).

But Loeb leaves the big question unanswered. Why in the world would AG Bondi disband such a valuable unit? Especially since, when assets are forfeited to the U.S. government, the staff time and expenses incurred were covered.

Thanks to Washington Post reporter Peter Whoriskey’s story in today’s paper, we now have the answer.

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An Assessment of the Swiss Return of Stolen Assets to Uzbekistan

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The return of assets stolen by corrupt means is “a fundamental principle” of the United Nations Convention Against Corruption, and the Convention mandates that its now 191 state parties “afford one another the widest measure of cooperation and assistance” to ensure states victimized by corruption recover the proceeds of the crime wherever they are located (article 51).

Easy enough to state the principle. And easy enough to implement where the victim state’s leaders are democratically chosen, committed to advancing citizens’ well-being, and corruption is under control. But what if those conditions don’t hold? What if the same kleptocrats who stole the assets are still in power? Even if the crooks have been purged, so long as autocrats run the government, what guarantee is there that the assets won’t simply enrich the current powerholders? Or worse yet, fund measure to further repress their citizens?

As my friend and former Soros Foundation colleague Alisher Ilkhamov describes in the current issue of Central Asian Due Diligence (here), Switzerland is working through these issues as it begins to return to Uzbekistan the several hundred million dollars the former president’s daughter Gulnara Karimova stole. Uzbekistan’s government is a step above where it was when Gulnara set the record for shaking down foreign investors, but a budding democracy it is not. By a long shot.

Alisher describes the conditions Switzerland attached to the return of a first tranche of $131 million in 2022, how they were implemented, and how that experience should inform the recent agreement between Switzerland and Uzbekistan to return another $182 million. His assessment will be of value to policymakers everywhere wrestling with the return of stolen assets to states that fall far short of democratic, good governance norms.

Who Will Defend the FCPA?

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Last month President Trump ordered Attorney General Bondi to “cease initiation of any new FCPA investigations or enforcement actions” while she determines whether the way the act is now enforced advances American interests. If she finds it is not, the Presidential Executive Order directs her to revise the current enforcement guidelines. In theory any revision will be driven by what an objective review finds; in fact Trump’s February 10 order has loaded the dice. It starts off proclaiming FCPA enforcement:

“has been systematically, and to an increasing degree, stretched beyond proper bounds and abused in a manner that harms the interests of the United States”

It continues:

“Overexpansive and unpredictable FCPA enforcement against American citizens and businesses … for routine business practices in other nations … wastes limited prosecutorial resources [and] actively harms American economic competitiveness.

These claims are patently false — as those who have watched the uptick in FCPA prosecutions or been involved in them know.  They must now speak up: To prevent Trump and Bondi from derailing one of the most successful efforts to fight global corruption since the international community made it a priority.

The list of witnesses is long. It includes not only American executives, lawyers, FBI investigators and federal prosecutors but the counterparts in countries rich and poor who have worked with them to curb the scourge of bribery. They need to present the “true facts” to Attorney General Bondi to counter the “alternate facts” in the Trump order.

Already two former OECD General Counsels and three former chairs of its Working Group on Bribery have. In a February letter to Bondi they explain that the FCPA has advanced American interests by protecting “US companies from unfair practices by foreign companies” and they go on to provide additional evidence and reasons why FCPA enforcement policy requires little if any revision. Others need to go on record with stories of how and where enforcement measures helped American businesses and created good will for American interests generally.

Given Bondi’s unwavering fealty to Trump, the real facts are unlikely to stand in the way of her making drastic changes in FCPA enforcement, but changes will be subject to challenge in both a court of law and the court of public opinion. The more evidence on the record that that current enforcement policy advances American interests, the more likely any misguided revisions will be rejected.

Bondi has until August 9 to complete her review with the possibility of a 180 day extension. The sooner the true facts are on the record and the alternate ones revealed as half-truths existing in an alternate universe, the better. Submissions should be addressed to: The Honorable Pamela Bondi with the salutation Dear Attorney General Bondi: Her address:

  •  950 Pennsylvania Ave., N.W.
  •  Washington, D.C. 20530

GAB would be pleased to receive and share with readers copies of any submission.

Will the Outgoing Namibian President Pardon the Fishrot Defendants?

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On August 4 two former Namibian ministers, other once high-ranking government officials, and their accomplices go on trial for stealing millions of dollars from Namibian citizens. Unless, that is, President Nangolo Mbumba pardons them before leaving office March 20.

The pardon would not only subvert the rule of law but indelibly tarnish ruling party SWAPO’s legacy. 

SWAPO, the South West Africa People’s Organization, began life fighting to free Namibians from the grip of apartheid South Africa. Since securing Namibia’s independence in 1990, the party has won the respect of democracy advocates everywhere. In contrast to Mozambique’s FRELIMO and Angola’s MPLA, it has begun the transition from a tightly disciplined, brook-no-opposition guerilla army to a broad-based political party.

SWAPO is not all the way there yet, but seeing that senior party members are held accountable for taking bribes in Fishrot, where Icelandic fishing giant Samerherji paid defendants and possibly other SWAPO members for the rights to fish off the Namibian coast, is surely a major stride forward. (Fishrot details here, here, here, here)

The trial could well put on display more of the party’s dirty laundry. Hence the reason why some in the party’s inner-circle are pressuring President Nangolo to pardon the crooks. Their argument: a pardon will clear the decks for incoming President Netumbo Nandi-Ndaitwah to carry through on needed reforms without the distraction of Fishrot prosecutions. And Nangolo is retiring and so can take the political fall out from letting defendants off the hook.

The truth is the inner-circle’s real motive is nakedly self-serving. During the campaign, Nandi-Ndaitwah made her commitment to the rule of law crystal clear, virtually ensuring she will neither derail the prosecution nor lighten defendants’ sentences if, as expected, they are convicted. Indeed, some in SWAPO’s inner-circle fear she may countenance civil suits to force all those responsible for Fishrot, including those insiders pushing pardons, to compensate Fishrot victims for the tremendous harms the bribery caused them. (Damages fisherman suffered documented here and here.)

Will those among SWAPO’s founders committed to a liberal democratic, corruption-free future for Namibia join with the party’s younger, more progressive members to persuade President Mbumba to leave office honorably? To ensure that the efforts revered party founder Sam Nujoma and others have made to set SWAPO and Namibia on the democratic path continue?