Guest Post: The Obiang Trial Suggests Innovative Approaches To Fighting International Corruption

GAB is pleased to welcome back Frederick Davis, a lawyer in the Paris office of Debevoise & Plimpton, who contributes the following guest post:

Over the past two months, the French Tribunal de Grande Instance in Paris (the principal trial court) heard evidence in the case against Teodoro Nguema Obiang Mangue (known as Teodorin), on charges of corruption and money laundering, among other allegations. Teodorin is the son of Teodoro Obiang Nguema Mbasogo, the long-time – and notoriously corrupt – President of Equatorial Guinea, a resource-rich country that also has some of the most widespread poverty in the world. Yet Teodorin, who is currently Vice President , owns vast real estate in Paris, a private jet, a yacht, and a fleet of vintage and modern automobiles, among his other known assets. This case has been discussed extensively on this blog (see here, here, here, here, here, here, here, and here), but it’s useful to recap how the case came to trial in the first place:

The case against Teodorin was primarily the result of diligent efforts by NGOs, including the French anticorruption group Sherpa and the French chapter of Transparency International (TI). In 2007, Sherpa and others filed a complaint with the Public Prosecutor in Paris alleging that the ruling families of Equatorial Guinea, Angola, Burkina Faso and the Republic of the Congo held assets in France that were not the fruits of their official salaries. After a brief investigation, the Public Prosecutor dismissed the claims. Several of the NGOs, joined in some instances by citizens of the countries in question, then used a French procedure known as constitution de partie civile to cause a criminal investigation by an investigating magistrate (juge d’instruction). This effort was opposed by the Public Prosecutor. A Court of Appeals initially upheld the prosecutor’s position and dismissed TI’s intervention, but in an important 2010 ruling, the French Cour de Cassation (Supreme Court) ruled that TI was a proper partie civile authorized to instigate the criminal investigation. Ultimately Teodorin was bound over for trial, now with the support of the Public Prosecutor (as well as the continued active participation of TI and other NGOs). A decision is expected in October.

The procedures that brought Obiang to trial are interesting because they highlight four important differences between French and US criminal procedures, and more generally illustrate several legal deficiencies, in countries like the United States, that often hinder the worldwide fight against transnational corruption: Continue reading

The Obiang Trial: Misstatements of Facts and Law in the Defense’s Closing Arguments

GAB is pleased to publish this account and analysis by Shirley Pouget and Ken Hurwitz of the Open Society Justice Initiative of the final arguments of Equatorial Guinean Vice President Teodoro Nguema Obiang’s lawyers at his Paris trial for what is in effect kleptocracy.

court roomTeodoro Nguema Obiang Mangue’s trial concluded July 5, 2017, with closing arguments by his defense counsel. The trial marks a major milestone in the struggle to ensure accountability for grand corruption, even when committed by those at the highest political levels.  A spicy mixture of high principle, juridical gravitas, and sophisticated argumentation on intricate issues of pressing urgency in the real world, the trial also contained moments of wrenching emotion and undignified, even scandalous, claims and insinuations.

The final day was devoted to arguments by Teodorin’s lawyers: Emmanuel Marsigny, Equatoguinean jurist Sergio Tomo, and Thierry Marembert.  In sum they claimed i) that their client didn’t steal enormous sums of money from the people of Equatorial Guinea, ii) that even if he did, the theft wasn’t illegal under Equatorial Guinean law, and iii) that even if he did steal the money and it was a violation of EG law, a French court did not have the right to try him for it.  Their arguments mixed misleading and often downright false statements of the evidence with strained and fanciful interpretations of the law, all seasoned with dark suggestions that the trial was about race and politics rather than the massive theft of resources from the citizens of Equatorial Guinea.     Continue reading

The Obiang Trial: Prosecutor Seeks 3 Years Imprisonment, Large Fine, Asset Confiscation  

GAB is pleased to publish this account and analysis by Shirley Pouget and Ken Hurwitz of the Open Society Justice Initiative of the concluding arguments the civil parties and the prosecution made at the trial of Equatorial Guinean Vice President Teodorin Nguema Obiang.

The July 5th proceedings in the Obiang trial opened with the court rejecting the defense request that it be allowed to pursue its claim that the prosecution was unconstitutional.  It closed with the state prosecutor asking the court to find Teodorin guilty, sentence to him three years in prison, fine him €30 million, and confiscate all of his assets located in France.  In between the two civil parties – CORED, a coalition of Equatorial Guinean political parties, and Transparency International-France – presented their arguments in support of conviction.  Continue reading

Guest Post: How Will Nationalist Election Outcomes in the US and UK Affect Foreign Anticorruption Enforcement?

Professor Rachel Brewster of Duke Law School and Mat Tromme, Project Lead & Senior Research Fellow at the Bingham Centre for the Rule of Law, contribute today’s guest post, which is based on discussions at a recent Bingham Center-Duke Law School FCPA Roundtable:

In the past year, we have twice seen voters make a significant turn toward nationalism. In June 2016, in a move that was largely motivated by protectionist views, the UK voted to leave the EU, and in November, the United States elected Donald Trump, who campaigned on an “America First” promise. What do these developments mean for US and UK enforcement of their respective laws against overseas bribery (the Foreign Corrupt Practices Act (FCPA) and UK Bribery Act (UKBA), respectively)? Many worry that, insofar as government leaders view anticorruption laws as harming their country’s international competitiveness (a dubious assumption), then nationalistic fervor can lead to weaker enforcement. This is a reasonable concern in both countries—but a more careful analysis of the situation suggests uncertainty is greater in the UK than it is in the US.

Continue reading

Guest Post: Encouraging Signs for a Possible U.S. Legislative Crackdown on Anonymous Companies

Gary Kalman, the Executive Director of the FACT Coalition, contributes today’s guest post:

A little over a year ago, the International Consortium of Investigative Journalists (ICIJ) released the Panama Papers, a treasure trove of information and a window into the world of financial secrecy. In some ways, much of what the Panama Papers revealed was already well known. Previous estimates put the amount of money hidden in offshore secrecy havens somewhere between $8 trillion and $32 trillion. In 2015, The New York Times published an impressive five-part series on the use of anonymous shell companies to purchase prime real estate in New York City. Prior to that, the U.S. Justice Department filed a lawsuit (which they just won on June 29th) to force the forfeiture of New York property secretly owned by the government of Iran in direct violation of economic sanctions. And so on. Yet it is hard to deny the captivating intrigue of the specific stories in the Panama Papers involving Russian kleptocrats, world leaders, athletes, movie stars, and others.

The big question is: more than a year later, did anything change? As I recently observed, there are indeed encouraging signs around the world, particularly in Great Britain, several EU member-states, and some developing countries such as Ghana. What about the United States? After all, with U.S. transparency laws ranging from weak to non-existent, there is little need to go to Panama to launder one’s dirty money. While Delaware gets the most notoriety, no state collects information on the true (“beneficial” owners of corporations. In fact, in its recent assessment of the U.S., the Financial Action Task Force, an international anti-money laundering body, noted that for all the progress the U.S. has made, the lack of beneficial ownership transparency remains a glaring weakness. And in the past, when some U.S. legislators – most notably former U.S. Senator Carl Levin (D-MI) – pushed legislation to require states to collect beneficial ownership information, the proposed bills never received so much as a hearing.

That may be about to change, and anticorruption advocates should take note. Continue reading

Day Six of the Trial of Teodorin Obiang

GAB is pleased to publish this account and analysis of the 6th day of the trial of Equatorial Guinean Vice President Teodorin Nguema Obiang by Shirley Pouget and Ken Hurwitz of the Open Society Justice.

On day six of his trial for actions arising from theft of public monies, Teodorin’s lawyers offered several legal defenses.  The most bizarre, and the one most strenuously advanced, was that in Equatorial Guinea theft of public funds is not a crime if the thief is a senior government official.  Teodorin was a government minister at the time he stole the money, and according to his lawyers, there was no law in Equatorial Guinea that made it a crime for a minister to steal public funds.

The defense also tried to lob a procedural bombshell into the proceedings.  It claimed that the way French courts have interpretred bribery as a predicate offense for money laundering is unconstitutional.  This constitutional objection, a Question Prioritaire de Constitutionalite, could have been lodged early in the proceeding.  Raising it so late in the case, would, if the court accepted the defense request, postpone the trial proceedings for many months. 

Continue reading

Guest Post: Using Open Data To Combat Corruption—Moving Beyond the Hype

Robert Palmer, the Director of Partnerships and Communication at the Open Data Charter, contributes today’s guest post:

In order to tackle corruption effectively, one first needs to understand the networks that link government officials, businesses, and professional intermediaries, and then work to either dismantle these networks or at least ensure that these webs of connections are not exploited to enrich individuals and undermine good government. Fortunately, these clandestine networks often leave traces in government-held databases, such as company registers, land title deeds, asset disclosures, and other official records. That’s where open data can be helpful. When the government provides easily accessible public information, it makes it easier for government officials, journalists, and citizens to follow financial flows, understand who’s providing government services, and to spot suspect behavior. And that’s why there has been so much enthusiasm about the open data in the anticorruption community. In 2015, for example, the G20 anticorruption working group announced a common approach saying that “Open Data can help prevent, detect, investigate and reduce corruption.”

Yet what’s happening on the ground isn’t living up to this hype. Part of the reason is that, as the Web Foundation and Transparency International found in a recent study of five G20 countries, many countries have made only limited progress toward meeting international commitments on open data. But even where open data is available, relatively few organizations are actually using open data to expose and combat corruption. There are, of course, exceptions, including Global Witness, the data journalists at Organised Crime and Corruption Reporting project, and accountability groups such as BudgIT. Yet the potential for open data to help fight corruption remains largely unrealized.

To help address this shortcoming, the Open Data Charter has spent the last year pulling together a guide for how to use open data to combat corruption. The guide lists 30 types of datasets that could help expose and combat corruption if they are released in the right way, as well as key data standards to ensure consistency and quality between different countries. Of course, the underlying assumptions here are that the types of data listed in the guide can be collected and released by governments in the ways the guide advises, and that there are anticorruption actors who can process this data in ways that are helpful in exposing or preventing corruption. In order to probe these assumptions, the Open Data Charter has teamed up with the Government of Mexico to “road-test” the guide. This will include working out which of the 30 datasets in our guide the government already publishes, which further ones can be released, and how to engage potential users. We’re interested in understanding how if data is released in the right way, users such as journalists, law enforcement, and civil society can process the data and then use it to have an impact on corruption.

Our approach to this piece of work is guided by a real desire to learn what works: what’s helpful to the government and what’s helpful to external stakeholders who want to tackle corruption. We hope to be able to report on our initial findings over August. If you’re interested in learning more, please get in touch with me: robert [at] opendatacharter.org. In the spirit of transparency and collaboration, the guide itself is open to comment here.