Asset Recovery

Introduction

A recent European Commission report estimates that “stolen African assets equivalent to more than half of the continent’s external debt are held in foreign bank accounts.” Some African leaders have begun to focus on the repatriation of these looted African assets as an important element of anti-corruption efforts, following the precedent set by the Holocaust Claims Commission in recovering assets stolen from Jewish people by the Nazi regime.

Asset recovery is a difficult task and is fraught with the complicity of the banks involved, the navigation of a costly international legal labyrinth and the fact that those implicated in public looting are usually those with the most power and influence. This case study is arranged in five sections.

The first section highlights the problem of the looting of African assets through a selection of articles relating to various corrupt individuals around the continent.

The second section documents the international communities’ response to asset recovery through relevant sections of anti-corruption declarations and conventions, including the UN Convention against Corruption and the AU Convention on Combating and Preventing Corruption.

The third section is a selection of academic and media commentaries on conventions as well as asset repatriation.

The fourth and fifth sections document the differing fortunes of two African states that have attempted much publicized asset recovery campaigns.

Nigeria achieved a qualified success, recovering a significant amount of money but not without having to make a somewhat unsatisfactory deal. Kenya, on the other hand, made significant progress before an apparent implosion of political will left the asset recovery campaign floundering.

In both case studies the documents outline the situations and mechanisms that have lead to such vast looting, the political contexts in which asset recovery has occurred, and the methods employed by the governments to seek to recover these funds.

As the experiences of Kenya and Nigeria show, it seems that states embarking on asset recovery campaigns have to walk a delicate line between justice and monetary restitution. Having tracked down looted funds, states struggle to prosecute those involved and repatriate the money, becoming bogged down instead in legal battles between the ‘owners’ of the money, or the international banks that hold the money, or both.

States that seek recourse through their courts are doomed to see their asset recovery cases flounder if their judiciary is compromised (“Why hire a lawyer when you can buy a judge?”, as the Kenyan saying goes)  as those implicated slow prosecutions to a standstill through their own power and influence.

The challenge for external actors is thus to assist states in their repatriation efforts to help close the gap between justice and recovery of funds.

This case study was produced by Daniel Scher, Research Intern, ISS Corruption and Governance Programme

The Problem

• Looted Money (PDF 8KB)
• The Nation: Kenya: US$1 Billion loot is traced to three top citizens, 29 April 2004 (PDF 40KB)
• New African: Not Easy to get Abacha's Loot, July/August 2001 (PDF 32KB)
• The Economist: Nigeria's missing billions, 22 October 1994 (PDF 40KB)
• BBC: Belgians hunt Mobutu millions, 8 December 1997 (PDF 24KB)
• Ed Stoddard, Reuters: Leaders got rich, while the people went hungry, 13 June 2005 (PDF 44KB)
• Calestous Juma, Business Day: Time to find embezzled billions, 18 January 2005 (PDF 44KB)
• Financial Times (UK): Help needed to trace Mugabe funds, says PwC (PDF 36KB)

Official Documents

• UN: Articles 51 - 57 from the UNCAC, 25 June 2005 (PDF 64KB)
• AU: AU Convention on preventing and combating corruption, 11 July 2003 (PDF 52KB)
• TI: The Nyanga Declaration on the Recovery and Repatriation of Africa's Wealth, 4 March 2001 (PDF 64KB)
• Gillian Dell, TI: Overview of AU convention, 2004 (PDF 40KB)
• Gillian Dell, TI: Overview of UNCAC, 2004 (PDF 32KB)
• UN Corruption Toolkit: Recovery and Returns of the Proceeds of Corruption (PDF 184KB)
• Commission for Africa: Stolen Assets, 2005 (PDF 56KB)
• UNIS: Summary, 10 December 2004 (PDF 48KB)
• UNODC: UNODC to assist States trying to recover stolen assets, February 2005 (PDF 40KB)

Commentary and Opinions

• Tim Daniel, TI Kenya: Tracking down stolen assets: the Nigerian experience, May 2001 (PDF 52KB)
• John Conyngham, US House of Representatives: Recovering Dictator‘s Plunder, 9 May 2002 (PDF 176KB)
• Peter Reuter and Edwin M. Truman, Institute for Int'l Econ: Chasing Dirty Money, November 2004 (PDF 116KB)
• TI Kenya: Is Kenya ready for assets recovery, September 2003 (PDF 92KB)
• Tim Daniel, International Law: Repatriation of looted state assets, June 2004 (PDF 100KB)
• TI: Legal Hurdles to repatriation, 6 January 2004 (PDF 448KB)
• Notes on Asset Recovery in the U.N. Convention Against Corruption, 2004 (PDF 408KB)
• Bill Gilmore, Organization of American States: The Return of Plundered State Assets, 28-29 March 2005 (PDF 104KB)
• NYT Editorial, 30 September 2003 (PDF 36KB)
• Jacques de Watteville: Is increased international co-operation compatible with the protection of privacy? 9 September 2002 (PDF 120KB)
• Saiful Karim, The Daily Star (Bangladesh): UN Convention against corruption: A gallant move for corruption free world, 3 January 2005 (PDF 56KB)

The Nigerian experience

Background: Abacha and Corruption in Nigeria

• BBC, General Abacha's Era of Dictatorship, 25 April 1998 (PDF 48KB)
• Hakeem Jimo et al, Global Corruption Report, Corruption in West Africa, 2001 (PDF 124KB)
• Antony Goldman, Christian Science Monitor, Same Salary Three Lifestyles, 2 May 1997 (PDF 48KB)
• Economist, Nigeria's Missing Billions, 22 October 1994 (PDF 36KB)
• PublicIntegrity.org, Nigeria Corruption TimelineDecember 2003 (PDF 52KB)
• Tom Nevin, African Business, Nigeria Most Corrupt in Africa - TI, January 2002 (PDF 44KB)
• SAPA, Freeze Abacha's Accounts: TUTU, 16 November 1995 (PDF 32KB)

Obasanjo Drive to Reclaim Assets

• Mail & Guardian, Africa's Leaders Have looted billions, 14 June 2002 (PDF 32KB)
• Eniwoke Ibagere, BBC Corruption Obasanjo's biggest challenge, 28 May 2000 (PDF 44KB)
• The Economist, Economist Nigeria's future, 6 March 1999 (PDF 64KB)
• James Rutter, Euromoney Interview with Obasanjo, September 1999 (PDF 64KB)
• Tom Masland, Newsweek Lost Billions, 13 March 2000 (PDF 64KB)
• Norimitsu Onishi, New York Times, Nigerian Leader Amazes Many with Anti-Graft Drive, 23 November 1999 (PDF 88KB)

Repatriation of Stolen Assets: The Process

• Mail and Guardian, Nigeria in Talks with Swiss, 12 October 2003 (PDF 32KB)
• New African, Cameron Duodu, Nigeria targets the 'gnomes of London', June 2002 (PDF 48KB)
• New York Times, Nigeria investigates ex-ministers, 3 December 1998 (PDF 64KB)
• Journal of Money Laundering Control, Recovering the proceeds of corruption, Autumn 2002
• UNODC asset recovery program Nigeria (PDF 36KB)
• Wall Street Journal, Russell Gold, Wall Street Journal Nigeria Inquiry, 29 September 2004 (PDF 72KB)
• Mail and Guardian, Abacha's family swaps 1.2b, 19 March 2002 (PDF 36KB)
• BBC, Nigeria recovers Stolen money, 27 November 2003 (PDF 36KB)
• New York Times, Elizabeth Olson, Nigeria to recover 1b, 18 April 2002 (PDF 60KB)
• BBC, James Whittington, Nigeria Closes in on Missing Cash, 20 August 2003 (PDF 32KB)

The Banks

• BBC, Britain goes after Abacha millions, 18 October 2001 (PDF 36KB)
• BBC, Switzerland to give back Abacha millions, 17 April 2002 (PDF 36KB)
• Global Information Network, Tim Shorrock, Experts urge tougher US, World Bank Corruption Stance, 10 May 2002 (PDF 44KB)
• Panafrican News Agency, Lawsuit delays repatriating 1.3b, 21 June 2005 (PDF 36KB)
• New York Times, Jeff Gerth, Citigroup Head concedes poor controls, 10 November 1999 (PDF 72KB)
• New York Times, Timothy L. O'brien, Panel to Focus On Deposits by Africans, 5 November 1999 (PDF 72KB)
• Due Diligence Database, Maarouf Al-Dawabi et al, Proposal for Transparency International, 19 May 2003 (PDF 184KB)
• BBC, Swiss Banks criticized over Abacha loot, 4 September 2000 (PDF 48KB)

The Kenyan Experience

Background: Moi and Corruption in Kenya

• Africa Analysis, Creating a Toothless Watchdog Against Official Corruption, 31 July 2002 (PDF 44KB)
• Global Information Network, Katy Salmon, Urban Bribery Index, 21 January 2002 (PDF 44KB)
• BBC, Corruption Costs Kenya $1bn a year, 30 May 2003 (PDF 36KB)
• BBC, Corruption Besets Kenya Business, 25 January 2005 (PDF 32KB)
• Institute for Economic Affairs, Kenya, Corruption in Kenya, August 2000 (PDF 388KB)
• Transparency International, Kenya, Dealing Past, Economic Crimes and the Transition, 1 August 2002 (PDF 260KB)
• Mail and Guardian, Half of Kenya's Judges are Corrupt, 30 September 2003 (PDF 36KB)
• BBC, Cathy Jenkins, IMF Withholds Kenyan Aid, 18 January 2001 (PDF 32KB)
• East African Standard, Tom Mogusu, Graft Hurting Investment Flow, says Kippra, 23 January 2005 (PDF 40KB)
• African Business, Ander Versi, The Burr of Corruption, March 2005 (PDF 156KB)

Kibaki and Anti-Corruption

• Africa Analysis, Former 'bigwigs' Start to Fall, 30 April 2004 (PDF 40KB)
• News24, Kenya Declares War on Graft, 1 January 2004 (PDF 28KB)
• Mail & Guardian, Kenya Enacts Graft Busting Law, 17 April 2004 (PDF 32KB)
• Mail & Guardian, Kenya Sweeps Corrupt Ruler out of Power, 29 December 2002 (PDF 40KB)
• World Bank, Reforms in Governance in Kenya, 2003 (PDF 44KB)
• BBC, Cathy Jenkins, Kibaki Opens Parliament, 18 February 2003 (PDF 32KB)
• BBC, Kibaki Vows to Fight Corruption, 29 December 2002 (PDF 32KB)
• News24, Million Cheer Kibaki, 30 December 2002 (PDF 40KB)
• USINFO, Kelly Machinchick, USINFO News Kenyan Government Must End Corruption, 20 February 2003 (PDF 56KB)

The Goldenberg Affair

• The Nation, Recover Looted Billions, Urge Lawyers, 10 February 2005 (PDF 48KB)
• Mail & Guardian, Kenya Seeks to Unravel Fraud, 19 June 2003 (PDF 32KB)
• Afrol News, So Far, Corruption Worth US$ 1billion Disclosed in Kenya, 16 December 2004 (PDF 40KB)
• The East African Standard, Counsel: Goldenberg Scam Cost Sh100b, 11 February 2005 (PDF 56KB)
• BBC, Kenya Hunts for Missing Billions, 6 December 2003 (PDF 40KB)
• New York Times, Marc Lacey, Kenya Joins Nations Pursuing Funds Stolen by Ex-Leader, 21 December 2003 (PDF 68KB)
• East African Standard, T. Wolf, Repatriate Looted Cash to Sort out Kenya's Debt, 13 June 2005 (PDF 44KB)
• The Nation (Kenya), US$1 Billion Loot is Traced to Three Top Citizens, 29 April 2004 (PDF 40KB)
• Peter Warutere, Anatomy of a Scandal: Money, Power and the Winded Path of Goldenberg's Deals (PDF 176KB)

The Inquiry

• Mail & Guardian, Kenya Scam Inquiry Suspended, 30 November 2004 (PDF 32KB)
• Transparency International, The Abuse of Export Compensation Schemes in Kenya and Argentina, 24 February 2003 (PDF 436KB)
• BBC, Kenyan Papers Says Gold Scam Probe Report Expected to Lay Blame, 11 February 2005 (PDF 44KB)
• Gibson Kamau Kuria, Assisting Counsel, Judicial Commission of Inquiry into the Goldenberg Affair, 17 September 2003 (PDF 88KB)
• Kenya Launches Inquiry into £400m Export Scam, 26 February 2003 (PDF
• Financial Times, William Wallis, Kenya: Officials, Banks in $1bn Corruption Probe, 15 December 2003 (PDF 36KB)
• Mail & Guardian, Marathon Kenyan Graft Inquiry Ends, 10 February 2005 (PDF 32KB)
• Inter-Press Service, Darren Taylor, Moi Casts Long Shadow Over Goldenberg Commission, 18 February 2005 (PDF 36KB)
• Sunday Times, Moi is Accused of £2 Billion Diamond Scam, 13 June 2004 (PDF 44KB)

Loss of Political Will?

• The Times (UK), Xan Rice, Anti-Bribery Chief Gives up in Land of Greased Palms, 9 February 2005 (PDF 40KB)
• News24, Corruption Returns to Kenya, 3 August 2004 (PDF 36KB)
• The East African Standard, Githongo Breaks his Silence, 15 April 2005 (PDF 48KB)
• The East African Standard, Justice up for Sale, Says Githongo, 9 June 2005 (PDF 40KB)
• Daily Nation, Kenya Anti-Graft Watchdog Boss' Resignation Setback, 17 April 2005 (PDF 36KB)
• Mail & Guardian, Rodrique Ngowi, Kenya Takes US Corruption Message to Heart, 9 February 2005 (PDF 36KB)
• Mail & Guardian, Kenyan Anti-graft Chief Quits as Sleaze Reports Mount, 7 February 2005 (PDF 36KB)
• Mail & Guardian, Kenya's Anti-Corruption Tsar Quits, 8 February 2005 (PDF 32KB)
• The Nation, TI Row Spills into Berlin Parent Chapter, 17 April 2005 (PDF 44KB)