The Promise – and Risk – of Internationalizing the Corruption Fight: Prosecuting the Mozambique Loan Fraud

Manuel Chang, Mozambique’s longest serving Finance Minister, has just lost the first round in his attempt to duck U.S. charges he defrauded the Mozambique people out of some $2 billion.  A South African Magistrate ruled January 9 that Chang’s December 30 arrest in South Africa, requested by the U.S. Justice Department, was valid.  Assuming South Africa stands firm in the face of legal maneuvering by Chang and political pressure by the Mozambique government, Chang will join accomplices in a Brooklyn jail to await trial for corruption.

That the corruption trial of a former official of the one of the world’s poorest nations will be held in the courts of one of the world’s wealthiest and that the trial turns on the strength of a third country ’s legal system and the political resolve of its government shows both the promise – and the risk – of the internationalization of the fight against corruption. Continue reading

Holding Relatives Hostage: China’s Newest Way of Pressuring Fugitives to Return to Face Corruption Charges

China’s latest tactic in Operation Fox Hunt, its campaign to force those who have fled abroad to return to face corruption charges, has had the extraordinary, if unintended, consequence of uniting America’s bitterly divided political elite.  Last June, the American wife and children of accused fraudster Liu Changming were detained in China after a brief visit; his wife held in a “black site” and his children barred from leaving.  The ostensible the reason for holding them is because they are being investigated for “economic crimes,” but almost surely, as the family claims, the real reason is to pressure paterfamilias Liu to return to China to stand trial for corruption offenses.  Trump National Security Advisor John Bolton, avowed Trump opponents Senator Elizabeth Warren and Congressman Joseph P. Kennedy III, and leaders of Harvard and Georgetown universities are all demanding the Americans be permitted to leave China at once (accounts here and here).

Holding family members hostage to force a relative to surrender to authorities is a species of collective punishment, a patent human rights’ violation universally condemned by the world community. No wonder the Boltons, Warrens, Kennedys, Harvards and Georgetowns find themselves on the same side of the issue.

Reporting by the New York Times, however, suggests that there could be more to the case than appears at first glance.  That there may be reason for both the Chinese government and the strange bedfellows its policy has created in opposition to examine their actions in view of the global fight against corruption. Continue reading

All the Stars are Aligned in the Sky(net): Why Chinese Fugitives are Being Extradited

Skynet. To most American audiences, this word is evokes images of the omniscient, malevolent computer in Arnold Schwarzenneger’s classic, The Terminator. But in 2015, Skynet also means something else. Media outlets and the blogosphere (including this blog) are abuzz over Chinese President Xi Jiping’s “Operation Sky Net”: the Chinese government’s efforts to repatriate a “most wanted” list of over 100 Chinese nationals suspected of criminal corruption. (The name “Sky Net” traces its origins to the Chinese idiom, “The sky may look thin and sparse, but it is vast and won’t let you escape.”) Forty of the 100 are suspected of being in the United States—a prime destination chosen for its high standards of living and, more importantly, lack of extradition treaty with China.

It is hardly news that China is doing all it can to repatriate these fugitives abroad, and it is also old news that the U.S. and China have a rocky history when it comes to extradition. As Rick mentioned in a prior post, the United States is extremely reluctant to negotiate a formal extradition treaty with China, and the reasons are plenty: In the U.S. view, China suffers from weak rule of law, lack of due process, and an ignominious record for human rights violations. In addition to precluding the negotiation of an extradition treaty, these factors also stymie case-by-case extraditions. Indeed, until last month, only two Chinese fugitives in the U.S. had been extradited in the previous two decades. All of the above would seem to suggest that China’s recent efforts would be a presumed uphill battle. But in September 2015 alone, two suspected fugitives, Yang Jinjun and Kuang Wanfang, wanted for their separate parts in vast bribery, money laundering, and public corruption schemes, were successfully repatriated to China. What changed?

One way to explain China’s recent success in securing extraditions from the U.S. is that China’s recent requests for assistance in repatriating alleged fugitives involved in corruption crimes have come at a time when the United States has made anticorruption a point of special focus. In short, the stars (in the Sky Net) aligned. Continue reading

Can the United State Avoid a Hypocritical Anticorruption Policy?

Last week Matthew wrote how hypocritical Britain appeared when at virtually the same time Prime Minister David Cameron was telling leaders in Southeast Asia to take more vigorous action against corruption, his government was asking U.K. companies if Britain’s anti-bribery law was too harsh.  As Matthew explained, the contradiction was likely more apparent than real, probably the result of poor timing rather than any real difference between the government’s policy towards bribery by British and non-British firms.  Nonetheless, even the possibility of differing standards offered much ammunition to critics of the Cameron government’s aggressive international anticorruption campaign.

Like Prime Minister Cameron, U.S. President Barack Obama has been vocal in urging other governments to tackle corruption, lecturing the African Union during his recent visit on the evils of rampant bribery and telling its members to emulate the American example with its “strong laws” against bribery that “we actually enforce.” And like Britain, sooner or later the United States will face the charge that its international anticorruption rhetoric is hypocritical.  The difference will be that whereas the charges laid against the British government arose from a public relations faux pas, in the American case the charges will stem from a genuine contradiction, that between its human rights policy and its commitment to the U.N. Convention Against Corruption.

How will it happen? Continue reading