13 October 2009
Across Borders, Crime Fighters Cooperate to Recover Stolen Assets
But some countries are reluctant to enforce anti-bribery laws
Washington — Corrupt politicians, beware: The long arm of the law reaches far these days, across oceans, borders and jurisdictions. The United Nations Convention against Corruption (UNCAC) has ratcheted up pressure on countries that once provided safe havens for ill-gained loot to roll back bank secrecy and cooperate in recovering those assets.
Adrian Fozzard, director of the Stolen Asset Recovery Initiative launched by the World Bank and the United Nations in 2007, said the problem of stolen assets concerns rich and poor countries alike.
“Corruption crosses borders. You cannot deal with it just by pointing fingers at the developing world,” Fozzard said. Those paying bribes for concessions and contracts often come from wealthier countries, and “proceeds from corruption often go to their financial centers,” he said. Fozzard’s team provides expertise to those who want to stop corruption, but the initiative also serves as a spur to nations to develop and enforce robust anti-corruption laws.
Other international groups and programs help nations that are victims of corrupt leaders prepare requests for legal assistance from countries in which those leaders stashed their money.
Crime-fighting agencies — such as the FBI, Scotland Yard and Interpol — are not the only ones on the trail of leaders who looted national treasuries. Private lawyers are in the fray, too. Enrico Monfrini, a Swiss attorney, made a name for himself as a corruption-buster by assisting Nigeria’s and Haiti’s governments in getting back assets stolen and embezzled by their previous leaders. James Maton, a commercial litigator in London, helped Nigeria recover $120 million of the billions that strongman Sani Abacha stole during his five years as dictator and hid in bank accounts in the United Kingdom.
Maton, a partner with the firm of Edwards Angell Palmer & Dodge LLP, said: “There’s been a breaking down of the divide between the criminal process and the civil process.” Civil lawsuits to recover assets sometimes move forward when criminal investigations stall, he said. In the Abacha case, “we’ve had enormous assistance from the law enforcement agencies that carried out the investigation,” Maton said.
In the United States, Cabinet departments and agencies collaborate to fight bribery and kleptocracy. They range from criminal prosecutors at the Department of Justice to international affairs lawyers at the State Department to financial-fraud sleuths at the FBI, Treasury Department and the Department of Homeland Security. The FBI has an entire squad dedicated to investigating violations of the Foreign Corrupt Practices Act, a 1977 law that makes it illegal to bribe a foreign official to secure a business deal.
“It’s a huge, collective effort,” said FBI Special Agent Debra LaPrevotte. “FinCEN [Treasury’s Financial Crimes Enforcement Network] may find out that a foreign corrupt politician has bank accounts in Switzerland, and then I have the ability to work with Switzerland to trace the money to those accounts and try to seize them.”
When Siemens AG, the German engineering giant, admitted its routine payment of bribes to win contracts globally, LaPrevotte got hold of bank records that showed $1.2 million went to the son of the former prime minister of Bangladesh, who stashed it in a Singapore account listed under his children’s initials. The account was frozen, and recovery efforts are under way.
In 2007, Kazakhstan agreed to put into a new foundation helping poor children some $84 million recovered (with help from the United States and Switzerland) from bribes paid to crooked Kazakh officials for oil and gas leases.
LaPrevotte said: “Our goal is always to return the ill-gotten money back to the victim country in such a way that it does the best for the people of that country and never goes back into someone else’s pocket.”
WHERE BRIBES COME FROM
The international tide against corruption began to turn in 1997, when the Organisation for Economic Co-operation and Development (OECD) adopted its convention against bribery.
Enactment and enforcement of national anti-bribery laws have picked up steam since then, but there still is “little or no enforcement” in half the countries that have signed the OECD convention, including the United Kingdom, Canada and Japan, according to Transparency International, an independent watchdog group. “The scale and scope of bribery in business is staggering,” its 2009 Global Corruption Report said.
Thomas Burrows, associate director of the Department of Justice’s International Affairs Office that works on international crime, said, “The number of cases that we handle is growing rapidly because of the globalization of crime. Crime is much more likely to be transnational.”
Fighting corruption requires not only strong criminal enforcement and civil forfeiture laws, but strict ethics and disclosure rules for public officials, Burrows said.
The overwhelming majority of countries now agree on standards to which public officials and businesses must be held. Robert Leventhal, who directs the Anticorruption and Governance Initiative within the State Department, said: “The challenge now is to work with countries to put these standards into practice.”
