Friends of the FCPA Blog — Sandy Sierck and Nick Diamond, who represent the Socio-Economic Rights and Accountability Project in Nigeria — have another good idea. For years, SERAP has been petitioning the DOJ and SEC to return enforcement revenues to the real victims of overseas corruption: the citizens of the corrupt governments. Their latest proposal is a slam dunk.
You’ll recall that the DOJ, to its great credit, recently seized $458 million from the global bank accounts of Nigeria’s former dictator and five-star kleptocrat, Sani Abachi, under its Kleptocracy Initiative. In this letter to Attorney General Eric Holder, SERAP asks the DOJ to repatriate at least a portion of that money to the Nigerian people from whom it was stolen. They propose using the funds to finance a project of some kind to benefit the public.
We’ve done this before, and with great success. Remember that back in 2007, the DOJ retrieved $84 million that James Giffen had used to bribe high-ranking Kazakhstani officials on behalf of western oil companies. The DOJ then used that money — ALL of it — to create The BOTA Foundation, an NGO that improves the lives of poor children and families in Kazakhstan through investment in health, education, and social welfare. By all accounts their work has been extraordinarily successful and, notably, substantially corruption-free. Wisely, the DOJ kept the funds out of the corrupt government’s hands, instead giving them to a private NGO with corruption safeguards in place. And it worked.
Is there any reason why we should not now do the same for Nigeria?
It might be said that using enforcement revenues to benefit actual victims is the next frontier of anti-corruption enforcement. The momentum is building. And SERAP deserves much of the credit. The U.S. DOJ has historically been a world leader in anti-corruption enforcement; let’s hope it exercises that same leadership now.
Andy Spalding is a senior editor of the FCPA Blog. He is an Assistant Professor at the University of Richmond School of Law.
I wholeheartedly agree with the sentiment that the victims of the crime should be compensated for the damages they have suffered. Restorative justice is commonplace with other crimes and I do not see any reason for why it shouldn’t apply in the case of corruption and bribery. There is an interesting article on this question written by Shane Frick called ‘Restitution Orders and the FCPA’ in which the author likens the damages caused by corruption to those of the BP Deepwater Horizon oil spill, with the difference being that BP set up a $20 billion compensation fund for the victims of the spill whereas fines paid by companies that have caused damage by using corruption rarely go to the victims.
This is a good idea: when I worked in Nigeria (2001-7) on two Corruption-prevention projects in the civil service, I came across a phrase widely used to explain Nigeria's corruption problem – "Public money is no-one's money". Nothing in Nigeria is simple: many blame the Abacha regime for the destruction of Nigeria's institutions and public integrity generally. The Naira, once at par with the Pound Sterling, was by 2007 worth about 350 to the Pound. The oil wealth from the South was not being equitably shared with the (poorer) North. The 'resources curse' was (and still is) alive and well. The Civil Service was(and still is) a basket case. The Economic and Financial Crimes Commission was surprisingly effective under President Obasanjo, but has been hobbled since. Religious and ethnic tensions undermine any sense of national unity. Huge numbers of Nigerians 'live lives of quiet desperation'. So petty corruption thrives, but Grand Corruption seem to be thing of the past, thanks mostly to the EFCC.
There is much to do, and it must be done: starting to rebuild a national sense of 'the public interest' has merit.
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