New Podcast, Featuring Robert Manzanares

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Robert Manzanares, who served for many years as a Special Agent with Homeland Security Investigations, a division of the U.S. Department of Homeland Security that investigates a variety of federal laws dealing with cross-border criminal activity. Though Mr. Manzanares worked on a wide variety of fraud and corruption cases during his career at HSI, he is best known in the anticorruption community for his role as the lead agent in the case that ultimately lead to the seizure of substantial illegally-acquired assets of Teodorin Obiang, the Vice President of Equatorial Guinea and the son of Equatorial Guinea’s president, Teodoro Obiang. Much of our conversation focuses on that case, including the background on how HSI and Mr. Manzanares got involved in the case, some of the challenges that the investigators faced, and the broader significance of this case for the fight against global kleptocracy. We also use our discussion of that case to explore some broader issues, including the question of why it makes sense for the U.S. government to prioritize these cases, what can or should be done to target the Western individuals and firms that facilitate misconduct like Obiang’s, and what to do with seized assets in settings where the corrupt actors are still in power in their home countries.

You can find this episode here. You can also find both this episode and an archive of prior episodes at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Guest Post: France’s New Asset Recovery Bill Is an Important Step Toward Achieving Victim Compensation

GAB is delighted to welcome back Mat Tromme, Director of the Sustainable Development & Rule of Law Programme at the Bingham Centre for the Rule of Law, who contributes the following guest post:

Where asset recovery is concerned, France is probably best known for the conviction of Teodorin Obiang—the Vice President of Equatorial Guinea and son of the President—for money laundering (the first time that a French court has convicted a serving senior official of a foreign government), which resulted in the court ordering the forfeiture of some of Obiang’s assets, worth around USD 150 million. The decision is still under appeal, and the next hearing is scheduled for December 2019. But even if the conviction and associated forfeiture order are upheld, under existing French law those assets will go to the French state. (It is unclear whether other plaintiffs who can also establish a valid claim on the assets could also benefit from them in any way.) The forfeited funds will not go to the true victims of Obiang’s corruption—the people of Equatorial Guinea.

There are obviously a number of moral and practical questions coming out of this, not least the fact that the French state keeps the looted assets, as French courts remarked. Some countries and commentators argue that in cases of grand corruption like this, the forfeited assets should go back to the country from which the funds were stolen. But in the Obiang case, it would seem nonsensical to suggest that the forfeited assets be transferred to the government of Equatorial Guinea, as that would be tantamount to returning those assets to the Obiang family itself. The challenge, which many have struggled with, is how to return assets to a country in a way that benefits the victim populations when the country’s government is controlled by a kleptocratic political elite and where there is no rule of law. Related to this, it also raises questions about who ought to be considered the victim (the state, or the population?), and, if the latter, how to go about making appropriate compensation.

Earlier this month, the French Senate agreed on a new asset forfeiture bill that would address this problem by amending existing law so that when a French court orders the forfeiture of the illicit assets of a foreign public official or other politically exposed person (PEP), those assets, rather than being forfeited to the State, would instead go into a special fund that seeks to improve living standards of victim populations, improve the rule of law, and fight against corruption in the country where the offenses took place. (The state would, however, be able to retain a portion of the assets, up to a specified limit, to cover the costs of bringing the case in the first place.) Under the proposed bill, assets would be forfeited to the French state only in those cases where it is “absolutely impossible” to return the assets to the victim populations. The bill also calls for greater “transparency, accountability, efficiency, solidarity, and integrity” in the asset return process, principles that civil society had actively pushed for.

Of course, a great many details would still need to be worked out as the bill makes its way through the lower house of the French parliament (the Assemblée Nationale), especially as it’s not altogether straightforward to figure out how best to ensure that the seized funds will benefit the victim populations. The discussions at the Committee level in the Senate evince a preference for channeling forfeited funds through Overseas Development Assistance (ODA) on a case by case basis. But many of the practicalities still need attention, and French legislators have instructed the Conseil d’Etat (a body that provides legal advice to the government and doubles as a supreme court for administrative matters) to advise on the practical implementation of orders to return assets to victim populations. (When the Conseil d’Etat does so, this will itself be an important decision, one that the anticorruption should pay close attention to.)

And there are some other difficulties too, which Senators and their officials have openly acknowledged. As it currently stands, the French Criminal Procedure Code says that the return of assets requires the agreement of the requesting state (which, as discussed above, may not happen where a country is very corrupt), and so the Code will likely need amendments.Moreover, the offenses that would trigger asset forfeitures under the proposed bill are limited to concealment and laundering the proceeds of all crimes, though the Committee report also recognizes there may be difficulties with including any crime within the scope of offenses that can lead to forfeiture. Finally, though the bill focuses on assets seized from PEPs, that term is not actually fully defined in French law.

Despite these concerns, the bill is a significant step in the right direction, and a good illustration of how civil society organizations can inform and influence the asset return process (Transparency International France played a key role in encouraging the Senate to table the Bill, and CSOs and governments are also coming together to address the difficult questions that cases like these raise with respect to victim compensation.) Indeed, civil society involvement will be crucial to ensuring that the law is adopted by the Assemblée Nationale and implemented in a transparent way.

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