The movement to use anticorruption enforcement proceeds for the benefit of corruption’s true victims is gaining ever more momentum.
The UNCAC Coalition — a global network of over 350 civil society organisations in over 100 countries, committed to promoting the ratification, implementation and monitoring of the UN Convention Against Corruption — has recently drafted a letter to U.S. Attorney General Eric Holder. The letter concerns the disposition of $480 million in assets stolen by former Nigerian dictator Sani Abacha and recovered by the U.S. under the Kleptocracy Initiative.
The Coalition argues that the people of Nigeria are the true victims of Abacha’s corruption, and that the money should therefore be used to their benefit. But the Coalition concedes that the money cannot be placed in the hands of the Nigerian government. They agree, in other words, with what the DOJ has previously said: the local governments are less often the victims than the co-conspirators.
So how should we return the money to the people? Just as we’ve done it before, says the Coalition. They cite, as we have so many times on the FCPA Blog, the important (but largely forgotten) precedent of the James Giffen settlement.
Recall that Giffen allegedly bribed Kazakhstani officials on behalf of western oil companies to the tune of $80 million. That money was recovered in Swiss bank accounts and, through a memorandum of understanding with the U.S., Kazakhstani, and Swiss governments, placed in a trust to establish a civil society organization called the BOTA Foundation. BOTA funds various programs to help the poor of Kazakhstan and, by all accounts, has been both highly productive and free of corruption.
The UNCAC Coalition would like to see us do this again. They see no reason why we shouldn’t.
Neither do I.
With its recent $16 billion settlement with Bank of America, the DOJ signaled something very significant. Our enforcement agency believes that financial fraud settlements should be used, at least in part, to benefit the communities harmed by the fraud. A portion of the BofA settlement was set aside for that very purpose. And these are not discrete individuals who can prove direct harm under the victims restitution statutes. No, these are communities generally harmed by the misconduct.
Kudos to the DOJ. Between these two points — Giffen and Bank of America — we can draw a straight line. Let’s continue that line forward. The whole world wants to see it; everyone would win.
Many thanks to Sandy Sierck for passing this along.
Andy Spalding is a senior editor of the FCPA Blog. He is an Assistant Professor at the University of Richmond School of Law.