Introduction
Political leaders in this part of the world (Nigeria) are encouraged in part to be brazenly cor- rupt because they have safe havens to store their ill-gotten wealth outside the country. And as long as these havens exist, domestic wars on corruption are unlikely to go far. But if the havens are made unsafe, the incentive to steal will be greatly reduced. (ThisDay, 12 April 2005)
One of the main features of corruption in Africa in general, and Nigeria in par- ticular, is the regular transfer of looted public funds to overseas bank accounts (United Nations 2002). Indeed, much of the estimated $350 to $400 billion si- phoned off by Nigeria’s political class is said to be sitting in foreign, mainly Western, financial institutions.1 The transfer of looted public assets is not a phe- nomenon unique to African countries. For a long time, corrupt leaders in many Third World countries (Joseph Mobutu of Zaire, Ferdinand Marcos of Philip- pines, Alberto Fujimori of Peru, and Augusto Pinochet of Chile are good exam- ples) saw Western financial institutions as ‘safe havens’ to hide their loot (Trans- parency International 2004: 32). This was not without good reason. Unlike their own local institutions, which were easily susceptible to investigation once their government was overthrown, Western institutions, famous for bank secrecy rules and protection by their home governments, proved more reliable. This reason held particular attraction for African leaders, fleeing the double menace of a chronically unstable political and economic environment, characterised by fre- quent changes in government, and galloping inflation and depreciation of na- tional currencies (Sindzingre 1997). As African economic crises intensified in the
1
According to a UN study, Nigerians hold an estimated $170 billion in foreign bank accounts and as- sets (usually landed property), most of these in Western countries (United Nations 2002).
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1990s, attention shifted to how some of the billions stashed away in foreign lands could be returned to help grow national economies. Effective asset recovery, it was reasoned, would not only assist these poor countries redress the worst effects of corruption; it would also help send a strong message to corrupt officials that there would be no place to hide their illicit assets (Brinkerhoff 1999).
The third aspect of Obasanjo’s anti-corruption campaign, therefore, was prem- ised on recovering Nigeria’s billions stashed away in foreign banks. The cam- paign involved a frantic international effort aimed at identifying the hundreds of bank accounts and assets (landed property, companies, shares, etc.) held illegally abroad by corrupt Nigerian officials and then efforts aimed at ensuring that they were duly confiscated and the proceeds repatriated to the country. A second part of this campaign involved persuading the governments whose financial institu- tions are at the centre of this fraud, and indeed the entire international commu- nity, to initiate reforms leading to the adoption of new legislation and treaties to criminalise the fraud and prevent the international financial system from being used to launder stolen funds from poor countries such as Nigeria. These policies were clearly unprecedented in Nigeria,2 where pursuit of looted funds had largely been localised inside the country. As a consequence, they raised a number of questions. Did the Obasanjo government possess the necessary political will to see this policy through? Where would Nigeria get the technical expertise needed to uncover hundreds, if not thousands, of secret bank accounts owned by corrupt Nigerian officials abroad? Would the foreign financial institutions and their gov- ernments be willing to cooperate with Nigeria in its search for funds hidden in their vaults?
As the experiences of a number of other countries who have engaged in simi- lar battles clearly showed, recovering stolen assets from abroad is a Herculean task, requiring not only political will, a reliable legal system, technical know- how, and familiarity with the exigencies of countries holding the assets (‘re- quested states’) by those seeking to recover their assets(‘requesting states’)(U4 online (undated)), but also the financial and diplomatic muscle to overcome the administrative bottlenecks and political manoeuvres usually created by states who receive stolen assets (Turner 2004: 4). Undeterred by these difficulties, the Obasanjo government plunged into the fight, which soon transformed into one of its major foreign policy priorities. Subsequently, the struggle was boosted by several initiatives taken by the international community, aimed at depriving cor-
2
In 1984, a move by the Mohammadu Buhari military regime, requesting the aid of the British gov- ernment in recovering funds embezzled and stashed in British banks by the political-tycoon class of the Second Republic (1979-83), the very first of its kind, was quietly abandoned once the British Prime Minister, Margaret Thatcher, announced her intention to publish a list of Nigerians owning bank accounts in Britain (Graf 1988: 177).
rupt officials around the world of the opportunity of using the international fi- nancial system to hide their ill-gotten wealth (Daniel 2004). In this chapter, we will look at how this campaign was elaborated and prosecuted, beginning first as a purely Nigerian struggle before later turning into a major international preoc- cupation.