Stolen Assets, Stolen Spotlight in Development Negotiations

In Addis Ababa last week, government leaders engaged in what has become trite political theater: wealthy “developed” states pretend their foreign aid is a magnanimous display of their generosity and economically poorer “developing” states pretend they are serious about economic stability and independence.

The stage for this theater is the framework of “illicit financial flows” (IFFs) which conveniently packages the development/aid problem as an overwhelming phenomenon attributed to inanimate “flows” of corporate and drug trafficking activity outside of the control of the state. The success of this framing to free the public sector of any guilt or responsibility and to argue away the hours at the UN’s Third International Conference on Financing for Development was evident in the resulting Addis Ababa Action Agenda, which unsurprisingly fails to commit states to any obligation that would change the status quo.

In the lead up to the Conference, Soji Apampa, former anticorruption advisor to the UN Global Compact, cautioned against the understating of corruption as a cause of IFFs, as presented in the February report of the UNECA/AU High Level Panel on Illicit Financial Flows from Africa, which attributes only 5% of IFFs to corruption:

…[in] Nigeria, it would be hard to steal public funds, hide drug money or benefit from falsified commercial documents without an element of corruption creeping in. The attempt to reclassify corruption in Africa must therefore be instrumental, but to what ends?

As Kolawole Olaniyan, author of Corruption and Human Rights Law in Africa, pointed out in February,

“the Ebola crisis … has exposed the level of grand corruption and its devastating effects on critical institutions of governance… Sierra Leone’s Auditor-General’s recent report showed that the government could not account for nearly a third of the $20m earmarked for fighting Ebola in 2014”.

(Olaniyan employs a helpful Nigerian proverb to illustrate the point: without cracks and openings in a wall a lizard can’t inhabit.)

And so any debate on financing for development should first start by addressing public assets that are stolen – who they are stolen by and who helps keep them hidden, and for what motives - and how they can be returned.

This is what civil society working to track and return stolen public assets discussed at a well-attended but nonetheless dwarfed side event in Addis entitled “We Want Our Money Back,” mediated by Mr. Apampa, who, perhaps speaking from his own experience as part of the World Bank team that monitored the 2004-2006 Abacha loot return to Nigeria, highlighted that

“even with the best of intentions, no single stakeholder – government, private sector or non-profit civil society – could accomplish effective asset repatriation on its own”.

Even in relatively small and discreet cases, developing inclusive mechanisms for returning stolen assets creates opportunities to build models of accountable governance, international cooperation and sustainable development. These models could spill over into broader practice.

If we believe the theater, this is what everyone wants. So, why don’t we pay a little more attention?

Here are some highlights from the panel:

• Daria Kaleniuk, director of Ukraine’s Anticorruption Action Centre, has tracked and reported on missing public funds under former Ukrainian Prime Minister Pavlo Lazarenko, and former president Viktor Yanukovych. She highlighted the public’s demand for stolen asset recovery and return is a first step in identifying and understanding the legal and governance deficits which caused the leakage and stressed the need for cooperative working relationships with domestic and foreign law enforcement authorities. Kaleniuk stressed that when social movements create space for dialogue with authorities, “we need to be ready” to not only propose real solutions for the return of assets, but also to reform law.

• Laetitia Liebert, director of Association Sherpa, a French-based organization focused on strategic litigation to fight corruption and corporate abuse, highlighted the important role that can be played by NGOs in the jurisdictions where stolen assets are stashed, working with local or international whistleblowers. “This can be very dangerous work, to call out corruption at the highest levels, but when people are courageous enough to do it and they need our help, we want to help them… we might get threats by telephone calls, but for our partners, standing up to corruption can be a life or death decision,” Liebert said.

• David Ugolor, director of the African Network for Environmental and Economic Justice (ANEEJ), reported on the troubled 2004-2006 repatriation of $505.5m seized from accounts linked to General Sani Abacha, Nigeria’s disgraced former president. Ugolor argued that citizen involvement in returning stolen assets should not be viewed as “conditionality” imposed from a state which has seized assets: “This is not a conversation about conditionality. When the Swiss return Abacha loot to Nigeria, the principles of transparency, accountability and participation are not conditions, they are values that we all share, that we should all respect.”

• Swathi Balasubramanian of US-based [IREX](www.irex.org), spoke of helping to establish the BOTA Foundation, an entity created in Kazakhstan, funded by seized assets from alleged bribery by US corporations, which supported programs aimed at benefiting Kazakhstan’s citizens. “The BOTA Foundation brought ownership and legitimacy to the asset repatriation process,” she said. “$115 million was returned to the people of Kazakhstan and we’re able to account for every penny that was spent.” Balasubramanian noted that future efforts would likely benefit from even closer participation of the state in implementing the citizen-designed programs, and that the Foundation benefited from the robust oversight of the US and Swiss governments and the World Bank, in addition to the implementing support from IREX and Save the Children.