Dealing with corruption and IFF’s facilitators and enablers

In my training as a lawyer I was taught that it was a criminal offence for anyone to engage in stealing or theft, fraud, obtaining money by false pretences, corruption, looting and conversion of goods. My lecturers did not teach me about money laundering, illicit financial flows, shell companies, safe havens and other new terms coined to confuse the victims of grand corruption. In protest against such dubious use of terms, a Nigerian musician, the late Fela Anikulapo-kuti once exposed a multinational company for engaging in stealing, fraud and corrupt practices in Nigeria without being called to order.

In frustration, he waxed a record entitled “International Thief, Thief. It is high time we began to interrogate the full implications of the new concepts in bourgeois criminal law jurisprudence. In my presentations I am going to use words and phrases that actually convey the atrocities perpetrated by treasury looters and other economic saboteurs in Africa. However, since the resolutions passed in similar conferences in the past merely identified the quantum of Illicit financial flows my presentation will trace the root cause of the monumental economic crisis and suggest radical measures to end it.

THE ROOT CAUSE OF ILLICIT FINANCIAL FLOWS IN AFRICA

In the late 1960s and early 1970s the post colonial African States experienced an unprecedented economic crisis due to the refusal of the indigenous ruling class to empower the people to take control of the economy from the former colonial regimes. In his book entitled “Neo-Colonialism, the Last Stage of imperialism” Kwame Nkrumah had pointed out that “The essence of neo-colonialism is that the State which is subject to it is, in theory, independent and has all the outward trappings of international sovereignty. In reality its economic system and thus its political policy is directed from outside.” As the poignant observation made in 1965 by Nkrumah was ignored the economic crisis became compounded in the 1970s and 1980s. In response to the crisis a dubious recovery programme called “Structural Adjustment Programme” was introduced by the World Bank and the International Monetary Fund. In spite of the struggle of the working people against the programme designed by imperialism to further weaken the economy of Africa and further pauperise the masses the governments adopted and implemented it with religious zeal.

Thus, the neo colonial states abandoned the Lagos Plan of Action, the Africa’s Priority Programme for Economic Recovery 1986 -1990 and the African Alternative Framework for Structural Adjustment (AAF-SAP) 1989.The implementation of the World Bank/IMF-induced SAP led to the privatisation of the economy, capital flight, retrenchment and withdrawal of services from social services. Unregulated trade liberalisation and devaluation of national currencies promoted unbridled corruption and looting of public treasuries. It is submitted that the implementation of SAP and neoliberal policies have led to the loss of hundreds of billions of dollars through corruption, tax evasion and capital flight by foreign investors in Africa. According to the AU/ECA’s High Level Panel on Illicit Financial Flows, Africa has lost not less than $1-trillion in illicit financial flows over the past 50 years . The ugly trend which has continued unabashedly can only be arrested if the masses of our people are mobilised to own the fight against corruption in each African country.

In an interview with Africa Renewal, a United States based news agency, Mr. Thambo Mbeki said that “illicit financial flows are a challenge to us as Africans, but clearly the solution is global. We couldn’t resolve this thing by just acting on our own as Africans” In another forum, Mr. Mbeki had opined that “the goals of ending poverty in the world, reducing inequality within and among nations, and giving practical effect to the fundamental objective of the right of all to development remain vital pillars in the historic process to build a humane, peaceful and prosperous universal human society.” With respect, poverty in Africa cannot be fought on the basis of an alliance with foreign governments that profit from the underdevelopment of the continent. In other words, poverty can only be fought and abolished by the African people. The beneficiaries of the unjust international economic order can never cooperate with Africa in ending poverty. Neither will the crisis of poverty be solved by passing resolutions in the very many conferences held regularly in Africa on corruption, money laundering and illicit financial flows.

Instead of wasting precious time and resources on the search for foreign investors and financial aid the governments of African States are urged to actualise Article 21(1) of the African Charter on Human and People’s Rights which states that “All peoples shall freely dispose of their wealth and natural resources. This right shall be exercised in the exclusive interests of the people. In no case shall a people be deprived of it”. In order to ensure the equitable distribution of the abundant natural resources of the continent the African Union and the Mbeki Panel should constantly remind governments in Africa of the legal obligation imposed on them by article 22(5) thereof “to eliminate all forms of foreign economic exploitation particularly that practiced by international monopolies so as to enable their peoples to fully benefit from the advantages derived from their national resources.” It is only through popular ownership and control of human and natural resources of each country that poverty can be eradicated in Africa.

Matthew Page has stated that “Corruption is the single greatest obstacle preventing Nigeria from achieving its enormous potential. It drains billions of dollars a year from the country’s economy, stymies development, and weakens the social contract between the government and its people. Nigerians view their country as one of the world’s most corrupt and struggle daily to cope with the effects. Yet few analytical tools exist for examining the full range and complexity of corruption in Africa’s largest economy and most populous country.” The diversionary analysis of the likes of Page are quoted regularly by the media in Nigeria. Even our intellectuals depend on reports produced by Western governments and organizations to measure the extent of corruption in Africa. lt is embarrassing that Africans have become too apologetic in discussing grand corruption perpetrated by imperialism and its local lackeys. Many intellectuals and political leaders in Africa swallow hook, line and sinker the dubious policy of blaming the victims of grand corruption in underdevelopment countries of the world. Elsewhere I had noted that “The Transparency International has ranked South Africa, Nigeria and Kenya as the leading corrupt countries in Africa. While the classification is not disputed the hypocrisy of the organisation should be exposed. It is the height of fraud not to identify the western countries which receive and keep stolen fund from Africa as the most corrupt countries in the world. The Transparency International has never exposed the role of the banks in some islands which are allowed by the international financial system to warehouse billions of dollars stolen from me African countries by criminally minded leaders.”

A few months ago, Nigeria signed a triparte agreement with the United States and Jersey for the repatriation of $308 million out of the Abacha loot. The State Department spokesman, Mr. Morgan Ortagus pointedly made it clear to the Nigerian delegation led by the Minister of Justice, Mr. Abubakar Malami SAN that the Buhari administration would be made to refund the money if it was re-looted. Happily, the Secretary of the Economic and Financial Crimes Commission, Mr. Olanipekun Olukoyede promptly rejected the insult on behalf of Nigeria. During a recent anti-corruption walk in Lagos, Mr. Olukoyede disclosed that: “Two weeks ago, I was privileged to be on the team that went to recover $308 million for Nigeria. They are from Washington. You know what the Oyinbos told us when we wanted to sign the treaty? They had the audacity to look into our eyes and said: ‘If you people steal this money again, we will collect it back from you.’ I stood up against them, I said: ‘We are not a corrupt nation. A few people might have stolen money, but Nigeria is not a corrupt nation. We have a lot of youths who are not corrupt. And you know it is not their fault, (they said that) because they have seen recovered loot being looted again .

FACILITATORS AND ENABLERS OF LOOTED WEALTH IN AFRICA

The communication made to legal practitioners for the purpose of representing clients in civil or criminal cases is within the rule of privilege in all civilised countries. Hence counsel/client communication is protected by the law of evidence and Rules of Professional Ethics. However, partly due to the negative impact of the offence of money laundering the law has created some exceptions. Other professionals like accountants, bankers and estate managers are said to be facilitators of money laundering and Illicit financial flows. No doubt, these professionals service to the so called politically exposed persons who collude with financial institutions in western countries and in some tax havens to loot public treasuries in Africa. According to Saitoti ole Maika the director general, Financial Reporting Centre of Kenya, “Lawyers become vulnerable professionals, used knowingly or unknowingly by criminals to hide their ill-gotten wealth…Lawyers, like other facilitators of financial and legal transactions, need to safeguard their profession from abuse.” While it is indisputable that a number of lawyers and other professionals provide services to facilitate the exploitation of the resources of the African people the greatest facilitator and enabler of corruption, money laundering and Illicit financial flows in Africa is imperialism. In the United Kingdom Anti-Corruption Strategy 2017-2022, it is said that “corruption is a threat to security and prosperity both for the UK and for developing countries.”

Regrettably, the governments and the anti graft agencies lack the political will to recover the billions of dollars stolen from Africa by foreign governments and multinational corporations. Daniel Yaw Domelevo, the auditor general of Ghana explained the dilemma of African countries when he said that “A multinational [company] will make a profit of $10 million and then they will bring in a consultancy for 12 million and declare a loss. The result is that they have made a loss instead of profit, so this money goes to the tax haven where they have another organization which provided the consultancy, so no tax gets paid on the income that was made. That is the major cause of illicit financial flows in Africa.” The story is the same throughout the African continent. While the Economic and Financial Crimes Commission in Nigeria has successfully prosecuted many internet fraudsters it has refused to proceed against multinational corporations that sabotage the Nigerian economy through refusal to pay appropriate royalties an appropriate taxes with the connivance of highly placed public officers. At this stage, it is pertinent to cite a few examples:

1. The International Oil Corporations (IOCs) operating in Nigeria have been indicted in exportation of stolen crude oil from Nigeria to the tune of several billions of dollars. A recent study conducted by the NIMASA revealed that from 2011 to 2014 about 60.2 million barrels of of crude oil stolen by the IOCs were discharged in Philadelphia Port in the United states. The value of the stolen crude oil is $12.7 billion. The IOCs and the shipping companies involved in the oil theft are well known to the Federal Government. But the EFCC has not been allowed to recover the fund and prosecute the companies involved in the criminal enterprise.

2. In 2015, I found that the Federal Government had deliberately refused to implement section 16 of the Deep Offshore Inland Production Sharing Contracts Act which provided for an upward review of royalties whenever crude oil was sold beyond $20 per barrel in the international market. Owing to the refusal of the Federal Government to implement the law Nigeria lost billions of dollars. My campaign for the review of the law was ignored until the Federal Government became broke and had to amend the law last year. According to the Senate President, Dr. Ahmad Lawan, the amendment of the law would fetch Nigeria $1.5 billion per annum.

3. In the case of Attorney-General of Rivers State & 2 Ors v Attorney-General of the Federation (unreported Suit No SC964/2016) in which judgment was delivered in October last year the Supreme Court ordered the Federal Government to collect the outstanding royalties which had accrued for 18 years under the Deep Offshore Inland Basin Production Sharing Contract Act. Sequel to the epochal judgment the Minister of Justice, Mr. Malami SAN demanded for payment of $62 billion being unpaid royalties by the IOCs .But the Minister of State in the Ministry of Petroleum Resources, Mr. Timipre Sylva has assured the IOCs that Nigeria would not recover the huge fund. According to him, “Nigeria knows it cannot recover $62 billion from oil majors despite ongoing cases against the companies for money the government believes it is owed. Nobody can bring out that kind of money. I mean, we can’t get $62 billion. We can maybe get something from them but not $62 billion. It’s an opportunity we have lost.”

4. In 2009, Exxon Mobil, one of the IOCs applied to renew licenses for 3 oil blocks. The federal granted the application and directed the company to pay the sum of $2.5 billion. But the company paid $600 million and refused to pay the balance of $1.9 billion. An anti corruption civil society body requested two anti graft agencies to recover the public fund. The allegation was confirmed but both anti graft agencies were not permitted to recover the outstanding sum of $1.9 billion.

5. Last year, I had cause to petition the national assembly to recover the aforesaid fund and other proceed of crime totalling $105 billion which had been withheld or criminally diverted from the Federation Account. After assuring me in writing that the Senate would pass a resolution to address the challenges raised in the petition concerning the recovery of the huge fund the national assembly has since turned round to approve the request of the Federal Government for external loan of $32.5 billion for infrastructural development.

Studies have confirmed that the poverty caused by imperialism as well as the criminal diversion of public fund by unpatriotic public officers have forced the youths to embrace banditry, kidnapping and other violent crimes. I have also maintained that grand corruption is responsible for incessant killings on ill-maintained roads and comatose hospitals. Hence, I have argued that grand corruption is akin to crime against humanity. It is high time the Rome Statute is interpreted to classify grand corruption as a crime against humanity to be tried “by the International Criminal Court as stolen wealth is not an abstract idea dangling in the air; it fosters poverty, diseases and illiteracy, ill-health and general social deprivations. It also subverts good governance and law and order of the country from which the wealth has been stolen. Every single one of the index of underdevelopment mentioned above is interwoven with the holding of stolen wealth and it is inimical to basic human rights and decency.”

CONCLUSION

From the foregoing, you will agree with me that the platitudes of African governments and resolutions passed at conferences on corruption will not curb illicit financial flows from the continent. Corruption, money laundering and Illicit financial flows can only be fought and defeated through political struggle. This calls for a radical paradigm shift in politics so that elected officials will channel the commonwealth to serve the interests of the people of Africa. However, upon realising that corruption cannot be seriously tackled by the anti graft agencies President Buhari has said that the Federal Government “will educate, mobilise and encourage Nigerians at the grassroots level to take ownership of the fight against corruption, press for a crackdown on safe havens for corrupt assets, abolishment of bank secrecy jurisdictions and tax havens on the continent and beyond.” To achieve the objective the Board of the anti graft agencies should be constituted by nominees of popular and mass based organisations. It is such bodies that will mobilize the masses to own the fight against corruption as part of the struggle against the peripheral capitalist system that is responsible for grand corruption in Nigeria.

Finally it is undoubtedly clear that the neocolonial regime in Nigeria cannot muster the political will to confront the foreign companies and their privies that are involved in the sabotage of the Nigerian economy.Instead of applying the provisions of the relevant laws to recover the loot from the multinational corporations the federal government has embarked on multiple taxation of the Nigerian amidst the coronavirus pandemic. Since the resources of the nation are enough to take care of all citizens the struggle for the actualisation of the socioeconomic rights of Nigerians ought to be intensified. I am therefore compelled to call on all progressive trade unions and other patriotic forces to mobilize our people to take ownership of the war against corruption and looting of the public treasury. In combating corruption and other economic crimes the ICPC and other anti graft agencies should enter into an alliance with the masses of our people who are regularly victimised by the corrupt practices perpetrated by imperialism and its local privies.

This is a paper Falana presented at the Africa Regional Webinar on Combating Corruption and Illicit Financial Flows: New Measures and Strategies in celebration of the 30th anniversary of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) which was held in Abuja from July 14-15, 2020