Steel Vises, Clenched Fists and Closing Walls (Part IV)

By Alemayehu G. Mariam

Note: This is the fourth installment in a series of commentaries I intend to offer on U.S. foreign policy (or lack thereof as some would argue) in Ethiopia. In this piece, I argue that the Obama Administration’s recently announced Kleptocracy Asset Recovery Initiative to go after corruption in Africa and elsewhere could prove to be an extraordinarily effective tool to improve human rights on the continent. By focusing on corruption, the Obama Administration could reasonably demand good governance practices of African “leaders” while maintaining cooperation on counter-terrorism and security issues.

The Africa Kleptocracy Project

In June 2008, when presidential candidate Barack Obama was a few months away from electoral victory, I warned those dictators who survive by pickpocketing the American tax payer of the arrival of a “new sheriff” in town and advised them to clean up their acts and “shape up”[1]: “A new sheriff is coming to town. He does not carry a six-shooter but carries a law book. And he’s laying down the law for all the tin-pot dictators of the world.” In April 2009, I “read the tea leaves”[2] again and urged Africa’s panhandling dictators to “ride out before the big roundup” because the “new sheriff and posse are in town.” I am glad to say I read the tea leaves just right.

Barack’s Posse was a little late but finally showed up in Kampala, Uganda last week to lay down the law to Africa’s top kleptocrats (thieves masquerading as “heads of state”) gathered at their annual summit. President Obama’s “undersheriffs”, Attorney General (A.G) Eric Holder and Johnnie Carson, U.S. Assistant Secretary for African Affairs, told the huddled kleptocrats that a special Kleptocracy Asset Recovery Initiative (KARI) has been established in the U.S. Justice Department to recover the money they and their criminal cohorts have stolen from their citizens and restore it to its intended use:

I am pleased to announce that the U.S. Department of Justice is launching a new Kleptocracy Asset Recovery Initiative aimed at combating large-scale foreign official corruption and recovering public funds for their intended – and proper – use: for the people of our nations. We’re assembling a team of prosecutors who will focus exclusively on this work and build upon efforts already underway to deter corruption… I know that prosecution is not the only effective way to curb global corruption. We will continue to work with your governments to strengthen the entire judicial sector… We must also work with business leaders to encourage, ensure and enforce sound corporate governance. We should not, and must not settle for anything less… As many here have learned — often in painful and devastating ways — corruption imperils development, stability, competition and economic investment. It also undermines the promise of democracy… Like President Obama, I believe that the 21st century will be shaped by what happens here in Africa. Your security and prosperity, the health of your people and the strength of your civil society, will have a direct and profound impact on the world’s communities and on the advancement of human rights and human progress everywhere.

A couple of months ago, A.G. Holder addressing the 35-nation Organization for Economic Cooperation and Development in Paris said:

Put simply, corruption undermines the promise of democracy. It imperils development, stability and faith in our markets. And it weakens the rule of law. Corruption erodes, even destroys, the faith of citizens in their governments. As I speak, a corrupt official somewhere is enjoying undeserved and illegal proceeds. He may be driving a brand-new luxury car. She may be filling her off-shore bank account with tainted cash. They may be traveling first-class on all-expenses-paid holidays. Bribery in international business, for example, may center on shell companies and wire transfers, but no matter where — or how — it happens, the corrosive result is the same: stymied development, lost confidence and distorted competition. The result is unfairness, not justice; the consequence is economic decay, not development.

African Kleptocrats as Organized Criminals (Mafia)

In my commentary “Africorruption, Inc.”, I argued that the business of African governments is corruption.[3] In other words, the majority of African “leaders” seize political power to operate sophisticated criminal enterprises to loot their national treasuries and resources. President Obama’s approach to dealing with corrupt African governments is consistent with the informed view that corruption is not only the lifeblood of African dictatorships but also the most important single factor that accounts for gross violations of human rights and violent suppression of democratic institutions on the continent. Just like any organized criminal enterprise, be they street-level or Mafia-style gangsters, African kleptocrats have used threats, fear, intimidation and violence to maintain and perpetuate their corrupt financial empires. In that context, A.G. Holder’s announcement was nothing short of breathtaking. It was as though he was addressing the national convention of the “Commissione” of all the Mafia families from New York City, Chicago, Detroit, Miami, Atlantic City, Las Vegas, St. Louis, Los Angeles and Philadelphia. In Kampala, he was talking directly to the African equivalents of the Godfathers of the Bonnano, Columbo, Gambino, Genovese, and Lucchese crime families in one place. It was almost surreal.

Though A.G. Holder told the African kleptocrats that he has a posse of special corruption prosecutors saddled up, he omitted telling them what tools he would be using to bring them to justice. They can rest assured that he will be coming after them armed with the Racketeer Influenced and Corrupt Organizations Act (commonly referred to as the RICO Act or RICO; 18 U.S.C. § 1961–1968). RICO was originally enacted to prosecute the Mafia and others actively engaged in organized criminal activity. Over the years its use has been expanded to cover corporate and other crimes; and now its application is likely to be expanded even further to go after the corrupt and thieving African dictators who launder hundreds of millions of dollars every year in the U.S. buying businesses and homes and making “investments” in legitimate commercial enterprises. Section 1962 of RICO provides in part:

(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity… to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. (b)… through a pattern of racketeering activity… to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce… (c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity… (d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.

Simply stated, African kleptocrats who rob their nations blind and bring their stolen loot to the U.S. to launder it will be tracked down and forced to disgorge and face jail time as well. What is potentially devastating to African kleptocrats is the fact that a RICO charge could be brought not only against them, but also their associates, business partners, investors, and any others in the U.S. or elsewhere who “directly or indirectly” facilitate their criminal enterprises. The penalties are severe: up to $25,000 and 20 years in prison per racketeering count. The racketeers must give up all of the gains from the criminal activity including the hundreds of millions tucked away in U.S. banks. RICO also allows private individuals damaged by the racketeer to file a civil suit and collect treble (three times) damages if they are successful. Proving a RICO charge in court is considered to be relatively easy as it focuses on “patterns” of behavior as opposed to criminal acts. Since conspiracy is one of the charges that could be brought in a RICO case, the kleptocrats’ underlings, accountants, business associates and partners and collaborators could be prosecuted.

Fixing Human Rights Violations by Prosecuting Kleptocrats

A.G. Holder says the Obama Administration is committed to battling corruption as “one of the great struggles of our time.” Holder’s words, if translated into concrete action could have a huge impact not only on governance in Africa but also in improving human rights protections. Corruption is fundamentally a human rights issue. As Peter Eigen, founder and chairman of Transparency International has argued, “[C]orruption leads to a violation of human rights in at least three respects: corruption perpetuates discrimination, corruption prevents the full realisation of economic, social, and cultural rights, and corruption leads to the infringement of numerous civil and political rights. Beyond that, corruption undermines the very essence of the rule of law and destroys citizens’ trust in political leaders, public officials and political institutions.”

The fascinating thing about the Obama Administration’s approach is its creative use of U.S. criminal statutes to deal with African dictators as organized criminal enterprises. Simply stated, the Administration has decided to deal with African dictators as Mafia bosses! If the U.S. could effectively investigate, vigorously prosecute and aggressively seize the assets of Africa’s kleptocrats, the continent may finally begin to see significant improvements in human rights and governance, a dramatic reduction in corruption and generate significant resources from recovered assets for investment in infrastructure and other social programs for the African population.

As I have previously documented[3], Transparency International [TI] (the global coalition against corruption) in its 2009 Corruption Perceptions Index (CPI) again bestowed upon Africa the dubious honor of being Kleptocracy Central, the continental home of the world’s most corrupt governments in the world. Leading the parade of kleptocracies are the regimes in Ethiopia, the Sudan, Zimbabwe, Equatorial Guinea, Kenya and the warlords of Somalia. These countries scored an atrocious 3.0 or less on the index. In certain countries, the corruption trend appears to be irreversible. For instance, in 2002, Ethiopia received a dismal score of 3.5 on the corruption index. In 2009, eight years after the ruling regime had established the “Federal Ethics and Anti-corruption Commission” (FEAC) with great fanfare and after periodic reports of “major accomplishments” in combating corruption, Ethiopia’s score dropped to an abysmal 2.7.

Publicly-owned assets are acquired in Ethiopia by regime-supporters or officials through illegal transactions and fraud. Banks loan millions of dollars to front enterprises owned by regime officials or their supporters without sufficient or proper collateral. Businessmen must pay huge bribes or kickbacks to participate in public contracting and procurement. Those involved in the import/export business complain of shakedowns by corrupt customs officials. The judiciary is thoroughly corrupted through political interference and manipulation as evidenced in the various high profile political prosecutions. Ethiopians on holiday visits driving about town complain of shakedowns by police thugs on the streets. Even the U.S. State Department spokesman Ian Kelley stated last year that the U.S. is investigating allegations that “$850 million in food and anti-poverty aid from the U.S. is being distributed on the basis of political favoritism by the current prime minister’s party.”

Over the past three years, high profile corruption cases in Ethiopia have been reported in the media. In one case, it was established that “USD$16 million dollars” worth of gold bars simply walked out of the bank in broad daylight. The official “anti-corruption” agency described the heist as a “huge scandal that took place in the Country’s National Bank and took many Ethiopians by surprise [in which] corruptors dared to steal lots of pure gold bars that belonged to the Ethiopian people replacing them with gilded irons… Some employees of the Bank, business people, managers and other government employees were allegedly involved in this disastrous and disgracing scandal.” In another case involving a telecommunications deal with the Chinese, a high level regime official was secretly tape recorded trying to extort kickbacks for himself and other regime officials. The same “anti-corruption” agency reported that “there was another big corruption case at the Ethiopian Telecommunications Corporation that took many Ethiopians by surprise” which involved the “competitive tendering for the supply of telecommunication equipment.” After an investigation, FEAC “found out that nearly 200 million USD has been lost to corruption through the entire fraudulent and corrupt process.” No high level official in good standing with the regime has ever been investigated or prosecuted for corruption.

The poor and powerless bear the brunt of corruption in Africa. The devastating impact of corruption on the continent’s poor becomes self-evident as political leaders and public officials siphon off resources from critical school, hospital, road and other public works and community projects to line their pockets. As for President Obama, it seems that he has finally found the silver bullet to deal with Africa’s corrupt thugs. In a pun, no more cash and KARI for Africa’s kleptocrats.

To be continued….

FREE BIRTUKAN MIDEKSSA AND ALL POLITICAL PRISONERS IN ETHIOPIA.

[1] http://www.ethiomedia.com/all/6070.html
[2] http://www.abugidainfo.com/?p=8693
[3] http://www.huffingtonpost.com/alemayehu-g-mariam/africorruption-inc_b_367268.html

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