Risk Advisory's CEO, Bill Waite reflects on the tumultuous events since the FCPA Blog began 11 years ago, identifying key themes, and points out concerns for the future.
In 2007 Dick Cassin had the idea of starting the FCPA Blog. His mission: “to help compliance professionals and others everywhere understand how corruption happens, what it does to people and institutions, and how anti-corruption laws and compliance programs work.”
I've been reflecting on the tumultuous events since the FCPA Blog began 11 years ago, to identify what, for me, have been the key themes, and to understand some concerns for the future.
Others may have different views, but in the spirit of Dick Cassin's mission statement, I share my thoughts.
Don't forget the macro
With so much of our attention focused on new anti-corruption legislation and mega-enforcement actions, it's sometimes easy to forget that we all live every day with the consequences of corrupt regimes.
On 17 December 2010, Mohammed Bouazizi poured a gallon of paint thinner over his head and set himself on fire in front of the local municipal office in Sidi Bouzid, Tunisia. His act was one of protest and defiance. It followed arbitrary police action, replicated by local government officials, which deprived him of his ability to earn a modest living selling fruit and vegetables to support his extended family.
In that one act a fruit seller became a catalyst for mass protest against the corrupt Ben Ali regime. Over a few short weeks Ben Ali tried the standard dictator’s tactics of repression followed by concession. Neither worked. He then flew off to Saudi Arabia leaving chaos and absolute misery in his wake.
Two days after Ben Ali left Tunisia, Muammar Gaddafi, Libya announced his regret at the fall of the Ben Ali regime. Sensing that he was vulnerable Gaddafi went for concession followed by repression. First, he sanctioned cuts in the prices of food, purged his army of potential defectors and released Islamists. Too little, too late. He then released the full apparatus of a repressive regime - many protesters were shot and killed, others imprisoned and tortured.
As defeat neared, Gaddafi fled to home territory in Sirte. On 20 October 2011 he escaped district 2 in a convoy only to be attacked by a NATO air strike. Gaddafi sought refuge in a sewer where he was injured, captured, by some reports physically abused and humiliated, before dying on the way to hospital in an ambulance having previously been allowed to fall off the back of an open truck. Details of his autopsy have never been released.
In Egypt, Mubarak’s thirty year regime was to fall too. Mubarak was tried, convicted and jailed for complicity in the shooting of protestors. Only to be released on appeal before corruption charges brought him back to court to repeat the process.
But the reverberations of Mohammed Bouazizi's selfless act were not confined to North Africa alone.
The migration crises which followed the Arab Spring is now being felt in Europe and elsewhere. The fear of migrants entering Europe and arriving in the UK was a driver for Brexit, has fed right wing politics and policies in Hungary, Austria, France Germany and Italy and undermined the authority of the one credible leader in Europe -- specifically Angela Merkel. Moreover, the destabilisation of Western and Central Europe has undoubtedly emboldened President Putin.
Yes we can
On 12 April 2017, the Washington Post reported that Brazil’s Supreme Court had authorised the investigation of over 100 top politicians. The allegations - which are connected to Operation Car Wash have themselves since expanded - and now consume the country’s governing elite.
In the last 15 months many of those investigated have been convicted including President Lula, who received a 10 year sentence for taking bribes. Others are cooperating with the prosecutors. Many, many more prosecutions will follow.
On 4 July, as America celebrated its independence, Eike Batista, once Brazil’s richest man worth more than $30 billion, was sentenced to 30 years in jail for bribing Rio de Janerio’s state governor, Sergio Cabral. He too was convicted and for this, and other crimes, has been sentenced to 120 years.
One day earlier, on 3 July, Najib Razak, a former prime minister of Malaysia was arrested at his home in Kuala Lumpur in connection with the 1MDB scandal. It is alleged that more the $4.5 billion of state funds have been stolen by various politicians and business people. Razak himself is said to have stolen more than $700 million. As with Zuma in South Africa, previous government investigations cleared him of wrongdoing.
Searches of apartments owned by Razak and his wife revealed $28.6 million in cash, $12 million worth of handbags and 12,000 pieces of jewellery, together said to be worth approximately $180 million. These amounts exclude the millions of dollars which the 423 watches and 234 pairs of sunglasses, also recovered, are said to be worth.
On 16 March 2018 the director of public prosecutions in South Africa confirmed that the once untouchable head of the ANC, and former President, Jacob Zuma, would face 18 charges of corruption in addition to 700 counts of fraud and money laundering.
On 6 July, the New York Times reported that his son Duduzane, argued by some to be a conduit between President Zuma and the Gupta family, was to be charged with criminal offenses. The charges are said to relate to the alleged attempt by the Guptas to pay Mr. Jonas, the then deputy finance minister, a $45 million bribe to become the finance minister, presumably thereafter to do the Gupta’s bidding. Jonas declined.
On the same day in Lahore, Pakistan, three times Prime Minister Nawaz Sharif was sentenced in absentia to 10 years in prison, fined $10.5 million, and ordered to forfeit the subject of matter of the charges. It was found that he had failed to declare four flats he owned in London and the source of funds which had allowed him to make the purchases.
Four cases, four different parts of the world, where presidents, prime ministers and politicians have been or are being held to account. Not by third party nation state prosecutors but by their own courts. That is an empowering change.
By: Bill Waite, Group Chief Executive Officer, The Risk Advisory Group
This article was first published on the FCPA blog - click here to view.
Click here to read Bill’s second instalment and accompanying article.