Tag Archives: asset recovery

Smelling of Roses in Senegal 1

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Africa watchers have been viewing Senegal lately with a sanguine eye, as the West African nation’s recently-elected president, Macky Sall, capitalizes on his popularity to implement reforms.  Certainly the international investment community views Sall’s attempts to improve transparency and good governance positively.  One of the president’s first acts since the run-off election in March 2012 was to ask Karim Meïssa Wade, son of the former president, to render an accounting of his management of the National Agency for the Organization of the Islamic Conference (ANOCI), which Karim was appointed to lead in 2004.  Overrunning its budget and maintaining inaccessibly opaque records, ANOCI  developed Dakar’s transportation infrastructure in the run up to the 11th Islamic Summit.  Wade’s role in ANOCI and in positions he held before ANOCI (Personal Advisor to the President of the Republic) and thereafter (Minister of State for International Cooperation, Regional Development, Air Transport and Infrastructure) were criticized from inside and outside of Senegal.

The Wikileaks cables were particularly revealing:  they offered information from multiple high level sources showing that Wade’s father Abdoulaye, the former president, was planning to sell a large number of shares of Senegal’s most stable and lucrative company, the telecommunications firm Sonatel, representing fully 12% of the national economy.  The purpose of the sale?  To provide a vehicle for laundering money gained through corrupt means, while at the same time transferring the lucrative shares to Karim Wade and his cronies.

The hope is that the era of corruption has ended in Senegal.  Certainly the international development banks are looking favorably on developments there, and to a more equitable distribution and sustainable development pattern for Senegal’s reserves of phosphates of lime, aluminium phosphate, iron ore, gold, salt, petroleum and natural gas.

Authorities in Dakar are now turning to the capitals of Europe, the tax havens of the Caribbean, and hidden investments in the Middle East, to begin the process of confiscation and repatriation of the former regime’s ill-gotten gains.  Citizens’ groups will be satisfied with little less than a thorough accounting and substantial return of assets, and, critical of the former French President Sarkozy in this regard, they are hoping for increased cooperation by authorities in France and elsewhere.

Looking up to the UK SFO from Down Under Reply

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In a recent press statement, the UK Serious Fraud Office touted its accomplishments for the 2011-2012 prosecution season.  Drawing on data from the newly released SFO Year in Review 2011-12, outgoing SFO Director Richard Alderman noted that his office was “convicting more fraudsters, for longer periods, at an ever-lower cost to the public purse, “ adding that “most important of all, we’re recovering more money for the people who really matter:  victims.”

It seems that Mr. Alderman has good reason to be proud of the SFO’s accomplishments.  During the course of the year, over GBP 50 million of assets were recovered, and 73% of the defendants prosecuted by the SFO were convicted.  And the time it took for the organization to investigate a case and issue charging documents was reduced by more than half.

The report mentions the efficacy (at least from the perspective of the enforcement authorities) of corporate self-reporting in the context of the Mabey & Johnson case.  And, comparing the SFO’s practices to those of the U.S. Department of Justice, the report points to the novelty of its settlement with BAE, whereby the company agreed to a GBP 29.5 million ex-gratia payment to the nation of Tanzania (here and here).  “The money will be used to buy textbooks for 8.3 million children at all the 16,000 primary schools in the country.  While BAE also agreed [to] payments with the US authorities, that money just went to the US taxpayer – not to the real victims, as was the case with the payment we agreed for Tanzania.  We feel this is a more just and sophisticated approach.”    We save for another day a debate about the pros and cons of returning money to a country that ranks 100 (out of 183 countries) on Transparency International’s Corruption Perceptions Index.  Certainly it provides food for thought for those of us in the U.S. compliance community.

But it is that other former colony way Down Under that might benefit the most from emulating UK practices.  Just two days before the SFO report was issued, Australian journalists Ayesha de Kretser and Patrick Durkin complained that Australia has no dedicated corruption enforcement regulator, and that the Australian Securities and Investments Commission (ASIC) is facing AUD 8 million in budget cuts.  While ASIC can audit companies, it does not play a proactive role in investigating suspicions of bribery.  De Kretser and Durkin lament the lack of guidance from ASIC, and the failure of ASIC and the Australian Federal Police to work together to prosecute crimes.  They also note that several Australian companies are under investigation abroad.

Budget cuts?  The SFO says, “Bring ‘em on.”  The SFO’s budget has decreased in each of the last five years.  And not only does the SFO’s report demonstrate a significant reduction in the average cost of each investigation; it also claims to be saving the British taxpayer GPB 4.3 million by offering to move to less expensive premises in 2012.

We note that the OECD has not been as generous in its praise of the SFO as has Mr. Alderman (here); but their differences will have to wait for another blog post.