KLEPTOCRACY

To Return the Funds at All”: Global Anticorruption, Forfeiture, and Legal Frameworks for Asset Return

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I. INTRODUCTION

Down went the U.S. dis­trict judge’s gavel—and a home val­ued at near­ly three quar­ters of a mil­lion dol­lars in the Maryland sub­urbs of Washington, D.C., no longer belonged to the Honorable Diepreye Solomon Peter Alamieyeseigha (“DSP”), for­mer gov­er- nor of oil-rich Bayelsa State in Nigeria. The court held that full legal title to that res­i­dence passed to the United States Government (“USG”).2 In anoth­er court­room, down went the gav­el of anoth­er dis­trict judge, who ordered over $115 mil­lion in a frozen Swiss bank account belong­ing to the Government of Kazakhstan to be dis­bursed to an inde­pen­dent foun­da­tion to ben­e­fit the peo­ple of that coun­try. In yet anoth­er court­room, down went the gav­el, and Teodoro Nguema Obiang (“Teodorín”), son of the pres­i­dent of Equatorial Guinea and hold­er of the office of “sec­ond vice pre­si- dent,” agreed to the USG’s seizure of a set of life-sized Michael Jackson stat­ues orig­i­nal­ly from the entertainer’s Neverland Ranch, their sale at auc­tion, and the deposit­ing of the pro­ceeds into a USG account where they would become ful­ly vest­ed prop­er­ty of the United States.4

These seem­ing­ly dis­parate cas­es, involv­ing a for­mer gov­er- nor, a nation­al gov­ern­ment, and a vice-pres­i­dent who was also the son of a head of state, led to loss of title to real estate and cash and oth­er per­son­al prop­er­ty. None includ­ed a crim­i­nal con­vic­tion. All were out­comes of pros­e­cu­tions brought by the U.S. Department of Justice (“USDOJ”) as part of a new ven­ture, the Kleptocracy Asset Recovery Initiative (“Kleptocracy Initiative,” “USDOJ-KI,” or “KI”).

What exact­ly is the Kleptocracy Initiative? It can best be viewed as a pol­i­cy ini­tia­tive and ongo­ing pro­gram of pros­e­cu­to­r­i­al activ­i­ty oper­at­ing with­in the Asset Forfeiture and Money Launder- ing Section (“AFMLS”) of the USDOJ’s Criminal Division since July 2010. Its stat­ed objec­tives are “to iden­ti­fy the pro­ceeds of for­eign offi­cial cor­rup­tion, for­feit them, and repa­tri­ate the re- couped funds for the ben­e­fit of the peo­ple harmed.” The typ­i­cal tar­get is a promi­nent pub­lic offi­cial or ex-offi­cial or a close rela- tive—“politically exposed per­sons” in inter­na­tion­al anti­cor­rup­tion par­lance. The chief method­ol­o­gy for pros­e­cu­tions begins with inten­sive inves­ti­ga­tion, almost always joint­ly with the FBI or oth­er fed­er­al agency, and often in coop­er­a­tion with a for­eign inves­ti­ga- tive body.9 Next comes iden­ti­fi­ca­tion of assets with­in the U.S. believed to be pro­ceeds of for­eign cor­rup­tion. This lays the ground­work for a fed­er­al in rem civ­il for­fei­ture action. Procedur- ally, the main basis for these pros­e­cu­tions is the fed­er­al civ­il asset for­fei­ture statute,  U.S.C. Section 981; the typ­i­cal sub­stan­tive legal foun­da­tion is based on the mon­ey laun­der­ing statutes,  U.S.C. Sections 1956 and 1957.10

Successfully for­feit­ed assets then become USG prop­er­ty. The for­fei­ture of over $1 mil­lion in assets from DSP was its first suc­cess, but it is far from the largest prize net­ted by the USDOJ- KI. In its biggest mon­e­tary seizure to date, the Kleptocracy Initia- tive for­feit­ed over $458 mil­lion in funds trace­able to General Sani Abacha, Nigeria’s de fac­to ruler for much of the 1990s and of whose regime DSP was an ally. Other suc­cess­ful for­fei­tures have ranged from the hun­dreds of thou­sands of dol­lars to over $100 mil­lion.

The Kleptocracy Initiative, then, is an attempt to sys­tema- tize and insti­tu­tion­al­ize an inno­v­a­tive, hybrid prac­tice in which the USG asserts juris­dic­tion over prop­er­ty locat­ed with­in the United States, but the under­ly­ing crim­i­nal activ­i­ty giv­ing rise to the civ­il asset for­fei­ture pro­ceed­ings occurred out­side of the United States. Thus, USDOJ-KI seems to embody the vig­or­ous exer­cise of a nov­el form of extraterritoriality—where enforce­ment is hyper-local, but the under­ly­ing offense was com­mit­ted abroad. Due to its pro­ce­dur­al frame­work, it also rep­re­sents the transna­tion­al side of the dra­mat­i­cal­ly grow­ing prac­tice of domes­tic civ­il asset for­fei­ture. It stands square­ly with­in the inter­na­tion­al legal move­ment, also of the past two decades, to go beyond the “sup­ply side” of inter­na- tion­al cor­rup­tion as addressed by the Foreign Corrupt Practices Act of 1977 to pur­sue the “demand side”—those on the receiv­ing end of bribes and oth­er forms of cor­rup­tion.

By PABLO J. DAVIS

Whole doc­u­ment is here:

“To Return the Funds at All”: Global Anticorruption, Forfeiture, and Legal Frameworks for Asset Return

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