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A DOJ initiative that helps corruption’s victims

We reported on Monday that the DOJ had announced a $30 million settlement with a vice president of Equatorial Guinea under its Kleptocracy Initiative. I hope the world noticed the noble and sensible purposes to which DOJ is putting these funds.

Our enforcement agencies have recognized an important truth: the victims of these crimes are overseas, and the money should accrue directly to their benefit.  As the press release states, the U.S. Government is using “the proceeds of large-scale foreign official corruption . . . for the people harmed by the abuse of office.”

Great idea. Logically tight. Morally sound. And of course, completely legal under current federal law.

Accordingly, $20 million of the settlement will be given directly to a charitable organization in Equatorial Guinea. The remaining $10 million will be forfeited to the U.S., to be “used for the benefit of the people of Equatorial Guinea.”

Imagine how much good that money can do in that community. It’s breathtaking. 

And the U.S. Treasury isn’t going to miss it. I’m pretty sure about that.

So let’s give the DOJ the credit it deserves for putting into practice it’s bold and important claim

“We are committed to seeking justice for the often impoverished victims.”

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Andy Spalding is a senior editor of the FCPA Blog. He is an Assistant Professor at the University of Richmond School of Law.

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3 Comments

  1. I would love to see a followup story about the real outcome of this approach. In six months, ask the question: Has anyone who does not work for the charity actually benefited from the funds?

    What educational efforts are being supported by the funds? What health initiatives are being supported by the funds? What infrastructure projects are being paid for by the funds? And the most important question — how many citizens are using each of these?

    I like the DOJ approach, but it needs to include follow up to make sure it is not just feeding money back into a corrupt system.

  2. Yes, this is a very interesting and significant initiative. It relates to the whole issue of the repatriation of corruptly gained funds since in my view there has been far too little discussion of how these would actually be used following a hypothetical repatriation. I think there has to be some for of local Trust with a mix of local and international Trustees. It will be crucial in this case, being one of few precedents, that the governance of the 'charity' (what is it ?) is sound and supports very bona fide projects. Worth a good deal of international scrutiny.

  3. This does raise the interesting issue that if the funds are forfeited to the Treasury, do those funds then become subject to the transparency, openness, fairness and accountability principles embodied in Federal grant and procurement regimes?

    Should the DOJ wish to direct fund a particular local NGO, should the focus of that NGO be on anti-corruption or infrastructure, or might this be the right time to focus those funds on Ebola preparedness and Health systems strengthening?

    I would like to see a follow-up story on this promising approach that includes which organization was selected and why, who is on the Board of the selected organization, the capacity of that organization to receive the funding, and the goals of the project.

    The next follow-up will be on the independent audit report on the efficacy of the usage of the funding.


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