Guest Post: It’s Time for Plan B on Disbursing the Obiang Settlement Money to the People of Equatorial Guinea

Today’s guest post is from the civil society group EG Justice, a civil society organization that promotes the rule of law, transparency, and the protection of human rights in Equatorial Guinea. (For a longer discussion of the issues raised in this blog post, please visit the EG Justice website: www.egjustice.org.)

Last month, Professor Stephenson asked: “Whatever Happened with that Charity the Obiang Settlement Was Supposed to Fund?”  Not coincidentally, thousands of people in Equatorial Guinea have been asking themselves that same question for the last five years, and they have yet to receive a satisfactory answer. We are not entirely surprised by the impasse. When one drives into a cul-de-sac, with clear road signs warning ahead of time that there is no exit, one should only expect to return to the entry point. Likewise, when negotiating with authoritarian kleptocrats who consider themselves above the law and who are accustomed to acting with absolute impunity, it would be naïve to expect them to negotiate fairly.

The settlement between Equatorial Guinea and the U.S. appears to anticipate this impasse, laying out several options. The settlement first lays out what we might call “Plan A”:  Within 180 days, the U.S. authorities and the defendant (Teodorin Nguema Obiang) are to jointly select a charity to receive the funds realized from the sale of Nguema’s seized assets, with that charity to use the funds for the benefit of the citizens of Equatorial Guinea. But in apparent anticipation of the difficulties in reaching such an agreement, the settlement goes on to lay out a “Plan B,” according to which, if the U.S. and Nguema can’t mutually agree on a charity within 180 days of the sale of the assets, a three-member panel is to be convened to receive and disburse the funds—with one member of the panel chosen by the U.S., one by Nguema, and one, the Chair, by mutual agreement. Again anticipating the possibility that the parties will be unable to agree, the settlement has a “Plan C” (or a “Plan B-2”): If the parties can’t agree on a panel Chair, within 220 days after the sale of the property, the court retains the discretion to order the parties to participate in mediation, or the court may simply select a panel Chair directly. Continue reading

Guest Post: New OECD Report Highlights the Importance of Non-Trial Resolutions in Foreign Bribery Cases

Today’s guest post is from Senior Legal Analyst Sandrine Hannedouche-Leric, together with Legal Analysts Elisabeth Danon and Brooks Hickman, of the OECD Anti-Corruption Division.

 In December 2016, Brazilian, Swiss, and US authorities announced that the Brazilian construction giant Odebrecht would pay a combined fine of USD 3.5 billion as part of a coordinated resolution of foreign bribery allegations—the largest foreign bribery resolution in history. Like many foreign bribery cases concluded in the last decade, the Odebrecht case was resolved outside a courtroom. In fact, non-trial resolutions, also referred to as settlements, have been the predominant means of enforcing foreign bribery and other related offences since the OECD Anti-Bribery Convention entered into force 20 years ago.

The OECD Working Group on Bribery recently published a report on Resolving Foreign Cases with Non-Trial Resolutions. The report develops a typology of the various non-trial resolution systems used by Parties to the Convention, and sheds light on the operation and effectiveness of these systems. It also looks at the challenges they raise for law enforcement authorities, companies and other stakeholders in the resolution process. The data collected for the Study confirms and quantifies the widely-recognized fact that settlement, rather than trial is the dominant mechanism for resolving foreign bribery cases. The report finds that close to 80% of the almost 900 foreign bribery cases concluded since the OECD Anti-Bribery Convention came into force have been concluded through non-trial resolutions, and among the three most active enforcers of foreign anti-bribery laws—the United States, Germany, and the United Kingdom—this percentage rises to 96%. Non-trial resolutions have been responsible for approximately 95% of the USD 14.9 billion (adjusted to 2018 constant US dollars) collected from legal persons sanctioned to date. Additionally, the report finds that coordinated multi-jurisdictional non-trial resolutions have been on the rise over the past decade. Such coordination, which would not be possible through trial proceedings, has permitted the imposition of the highest global amount of combined financial penalties in foreign bribery cases. Eight of the ten largest foreign bribery enforcement actions involved coordinated or sequential non-trial resolutions involving at least two Parties to the Convention.

The study was launched last month during the OECD Global Anti-Corruption and Integrity Forum, in a panel discussion moderated by the Head of the World Bank’s Integrity Compliance Unit. Building on the Study’s key findings, law enforcement officials from Brazil, France, the United Kingdom and the United States discussed the challenges associated with non-trial resolutions based on their first-hand experience, and explained why the use of these instruments will likely continue to grow in the future. In particular, they discussed how non-trial instruments can help overcome procedural hurdles and fundamental differences between legal systems and cultures, and thus facilitate cross-country coordination in the resolution of foreign bribery cases. (The video of the session is accessible online. See the section “Watch Live” for Room 1 starting at 8:13:00).

Guest Post: Memo to the U.S. — Central America Needs More Anticorruption and Rule of Law Support, Not Less

The Trump Administration recently decided to terminate foreign assistance to Guatemala, Honduras, and El Salvador and to abandon America’ long-standing support for the United Nations/Guatemalan commission fighting corruption in Guatemala. In today’s guest post, retired U.S. Ambassador Stephen G. McFarland explains that corrupt officials and drug lords in the region are conspiring to “capture” these nations’ governments. Their citizens are already fleeing the countries in droves. How much greater will the pressures to migrate be if a coalition of corrupt politicians and narco-trafficantes takes over one of their governments? On national interest as well as humanitarian grounds, the ambassador argues that the United States should not only restore, but increase, support for anticorruption and rule of law programs.  

The April 17 arrest of Guatemalan presidential candidate Mario Estrada and accomplice Juan Pablo Gonzalez on drug trafficking charges has major implications for U.S. policy towards Guatemala and Central America’s “Northern Triangle.”  The U.S. Department of Justice (USDOJ) asserts that in January 2019, Estrada allegedly attempted to obtain Sinaloa cartel support for the assassination of rival presidential candidates in Guatemala’s upcoming June 2019 general elections and for financing his election campaign. In return, he allegedly promised that, if elected, he would give the cartel free reign to use Guatemalan ports and airports to traffic cocaine to the U.S.

If the USDOJ’s allegations are true: Continue reading

Guest Post: Whistleblower Protection in Kosovo–An Unlikely Success Story of Civil Society Collective Action and International Support

Today’s guest post is from Nedim Hogic, a PhD candidate at the Sant’Anna School of Advanced Studies in Pisa, Italy, and Arolda Elbasani, Visiting Scholar at New York University. The research on which this post is based was sponsored by Kosovo Open Society Foundation.

In Kosovo, as in the rest of the Balkans region more generally, anticorruption initiatives and institutional solutions have typically been top-down efforts based on templates recommended by international actors and hastily approved by a circle of local political allies. Few of those international initiatives have proved successful, often because the new laws provided enough discretion for political interests to thwart effective implementation. Hence, Kosovo, like much of the rest of the Balkans, seems trapped in a continuous yet futile cycle of international-sponsored institutional- and capacity-building measures, which have not delivered.

The 2018 amendments to Kosovo’s law on the protection of whistleblowers suggests a more promising model of legislative drafting. The amended law stands out for its collaborative and open mode of drafting, involving various international, governmental, and civil society actors, a welcome contrast to the more prevalent pattern of top-down, and largely futile, approach to legal and institutional reform. Continue reading

Guest Post: Evaluating the Personal Privacy Objections to Public Beneficial Ownership Registries

Today’s guest post is from Adriana Edmeades-Jones and Tom Walker of The Engine Room:

The abuse of anonymous companies to facilitate corruption, tax evasion, and other sorts of criminal activity has prompted reformers to call for corporations and other legal entities to provide governments with accurate information on the true (or “beneficial”) human owners of these companies. Transparency advocates have argued that governments should not only compile such beneficial ownership registries, but should make them public.Public beneficial ownership registries, according to their proponents, would increase the efficiency of financial investigations, ease the due diligence burden on companies investigating supply chains and corporate counterparties, and enable media civil society to scrutinize more effectively who owns and controls what among the global corporate elite. Opponents have advanced multiple objections to creating public beneficial ownership registries, including questions about their accuracy and effectiveness, as well as concerns about the effect on individual privacy, and the associated risks that such public registries could facilitate “identity theft, cybercrime, and blackmail.”

How seriously should we take the “personal privacy” objection to public beneficial ownership registries? In a new report, OpenOwnership, The Engine Room, and the B Team propose a framework to evaluate this issue, borrowing from the structured analysis of international human rights law. Crucially, under international human rights law not every interference with personal privacy qualifies as a violation of an individual’s privacy rights. A violation only arises if the interference with privacy lacks a legitimate justification. Determining whether an interference with privacy is justified, in turn, entails addressing three questions: (1) Is the interference lawful (that is, consistent with generally-accepted standards governing personal information)? (2) Is the interference necessary to advance some legitimate aim? (3) Is the degree of interference proportionate to the legitimate end sought?

Application of these three criteria in turn suggests that an appropriately-designed public beneficial ownership registry would not violate individual privacy rights: Continue reading

Brussels v. Bucharest: The Kövesi Case and the Future of EU Anticorruption Policy

Last week Matthew suggested that the Romanian government’s fierce opposition to Ms. Laura Cordruta Kövesi’s candidacy to head the European Public Prosecutors’ Office is a good reason why she should be chosen.  Ms. Kövesi led Romania’s anticorruption agency, the Direcţia Naţională Anticorupţie (DNA), until fired last July for what many observers believe was her refusal to back-off prosecuting senior members of the ruling party.  That her own government, one of Europe’s more corrupt, so opposes her, Matthew argued, is a sign that it knows, and fears, how effective she would be as Europe’s chief prosecutor.

In today’s guest post, Alina Mungiu-Pippidi offers a different perspective  – on why Ms. Kövesi is a candidate for the position and her government’s opposition to her selection and goes on to explain how the controversy arises from the European Union’s ham-handed intervention into Romanian politics, an intervention that has set back the country’s fight against corruption.  Professor Mungiu-Pippidi spear-headed several widely-praised anticorruption movements in Romania before becoming director of the European Research Centre for Anticorruption and State-Building and Professor at Berlin’s Hertie School of Governance. She is the author most recently of The Quest for Good Governance: How Societies Build Control of Corruption. Cambridge University Press will soon release her Europe’s Burden: Promoting Good Governance across Borders.

The Western media obsessed over Laura Codruta’s Kövesi’s firing as chief of the Romanian anticorruption agency at the demand of the Romania’s Justice Minister. It is again obsessing about her now that she is the European Parliament’s candidate for the job of European Public Prosecutor (EPP). That institution was recently created at the instance of another Romanian, former Justice Minister Monica Macovei, currently an independent Member of European Parliament who, as Romanian Justice Minister, first appointed Ms. Kövesi. Having fired Ms. Kövesi, the Romanian government is now attacking her candidacy, publicizing allegations of misconduct while she ran the agency and calling for her to be questioned about them at precisely the time she is scheduled to appear before the European Parliament on her nomination.

Whether the European Union needs a new, union-wide public prosecution office is itself open to debate. Ms. Kövesi’s selection as one of three finalists to head the office is even more questionable.  It appears to be Europe’s way of taking revenge on the Romanian government for firing her.  Continue reading

Guest Post: The European Commission’s Response to “Golden Passport” and “Golden Visa” Programs

Today’s guest post is from Anton Moiseienko, a research analyst at the London-based Centre for Financial Crime and Security Studies of the Royal United Services Institute.

 Investor citizenship and investor residence programs, known colloquially as “golden passport” and “golden visa” schemes, have a less than sterling reputation. Much of the disapproval comes from anticorruption organizations like Transparency International and Global Witness. Those two organizations published a joint report last year that criticized these programs for offering a “safe haven” to figures associated with corruption.

The European Union has also expressed concern about these programs in several of its Member States. For example, back in 2014 the European Parliament adopted a resolution that accused some Member States, in particular Malta, of an “outright sale of EU citizenship [that] undermines the very concept of European citizenship.” And this past January the European Commission published a report on golden visa and golden passport schemes that will do little to improve their battered reputation. The Commission report raises a number of worries about these programs, and expresses particular concern about golden passport programs, since citizenship in an EU Member State automatically confers EU citizenship with its attendant rights, including free movement.

There are at least three ways in which golden passport and golden visa programs threaten to undermine the fight against corruption. Continue reading