Corruption

On November 18, an army base in Metele in northeastern Nigeria was reportedly overrun by Boko Haram militants. It is estimated that over one hundred soldiers were killed and significant military materiel looted. Nigerian soldiers reportedly made a video allegedly showing and narrating the aftermath of the attack. Much about the incident remains uncertain or disputed.  The video, less than five minutes in length, shows destroyed tanks and other military equipment, which the narrator of the video claims is inadequate and outdated. He claims this is true of most of the military equipment provided to Nigerian soldiers. Agence France Presse carries a description of the video, Premium Times features an interview with an alleged survivor of the attack, and Sahara TV (the broadcast outlet of Sahara Reporters, an expatriate Nigerian media outlet based in New York) has posted online what appears to be the video in question, or something similar. In a statement, the Nigerian military headquarters refers to multiple videos and characterizes them as “doctored,” “fake news,” and spurious. Its spokesman is threatening legal action against those who disseminate them and calls for public support of the military. Among other things, the military claims that a much smaller number of soldiers were killed at the Metele base than the one hundred or so claimed by the video and other reports. For many Nigerians, military pronouncements have little credibility after years of prevarication and false statements. President Muhammadu Buhari has expressed “shock” over the Metele incident, and has summoned his service chiefs to discuss the matter. Claims that the Buhari administration and the Nigerian military are inadequately equipping soldiers for the fight against Boko Haram are reminiscent of similar charges made against the Goodluck Jonathan presidential administration at the height of the Boko Haram insurgency between 2014 and 2015. Then, as now, Nigeria faced upcoming presidential elections, which Buhari would go on to win. He campaigned on a platform of tackling corruption and restoring security, and central to his campaign was the defeat of Boko Haram.  The apparent revival of Boko Haram therefore constitutes for President Buhari an electoral liability as well as added danger now faced by ordinary Nigerians in the northeast. Furthermore, according to officials from Niger, the terrorist group recently kidnapped around eighteen girls from two villages near the border with Nigeria. The episode recalls the Boko Haram kidnapping of school girls from Chibok in 2014, though the large-scale kidnapping of school girls has become a common feature of the Boko Haram insurgency. The failure of the Jonathan administration to provide adequately for the military was widely ascribed to corruption. President Buhari has launched a high-profile initiative against corruption, though many Nigerians see it as ineffective. Hence, the revival of Boko Haram and claims that the military is ill-provisioned may call to mind earlier allegations of the Jonathan government’s fecklessness and corruption that Buhari campaigned against. 

Federal investigators in Brazil have uncovered corruption at the highest levels of the government and in the country’s largest corporations.

Corruption has become a burning political issue in South Africa, particularly in the final years of Jacob Zuma’s abridged term in office. The faces of South Africa's Zuma-linked corruption were the three Gupta brothers: Ajay, Atul, and Rajesh. They immigrated from Uttar Pradesh in India in 1993, and the family has since become enormously rich; Ajay was commonly thought to be among the richest people in South Africa with a fortune of some $700 million. The Guptas were close to Zuma, whose son worked for them. They are accused of “state capture,” influence peddling, contract skimming, and numerous other white collar crimes.  For the past several months, the Zondo Commission has been investigating high-level corruption, including that allegedly perpetrated by the Gupta brothers. Amidst Zuma’s fall from power a house they owned was raided by police and warrants issued for their arrest. The Gupta brothers are currently based in Dubai. They have been at the center of controversy for many years, implicating in their alleged corruption consulting giants KPMG and McKinsey, and British public relations firm Bell Pottinger in 2017. Shortly thereafter, in October 2017, the Financial Times reported that the FBI had opened an investigation into the activities of the Gupta brothers’ nephews—American citizens living in Texas—and their links to the brothers. The UK government at the time was also probing ties to HSBC and Standard Chartered. The Guptas are declining to leave Dubai and return to South Africa to testify before the commission, but it is important to note that they have thus far been formally charged with little, convicted of nothing, and deny wrongdoing. Many or most South Africans believed that Zuma oversaw massive corruption as president, especially in state-owned enterprises. His administration is also judged by many as having badly managed the economy, in part because of personnel decisions influenced by outsiders for their own benefit. Zuma tried to move the government in an authoritarian direction, but he was largely blocked by the country’s independent judiciary, a lively parliamentary opposition, and a highly vocal civil society and free media. President Cyril Ramaphosa, then his deputy, successfully drove Zuma from office before the latter’s presidential term ended in the face of widespread popular distaste for Zuma and his association with corruption. Nevertheless, Zuma retains significant political support within the ANC, among the rural poor, and especially among his fellow Zulus, who are about a quarter of South Africa’s population.  Ramaphosa reportedly was initially reluctant for the commission to go ahead, but, in the end, he had no choice because of various judicial rulings and parliamentary pressure. Once the commission began its work, Ramaphosa’s allies (and perhaps Ramaphosa himself) hoped that the commission would illustrate that the ANC could clean up its own house. Instead, according to critics in the media, the commission has shown that corruption was pervasive within the party. It is too soon to say what the impact of the investigations into the Guptas and corruption elsewhere will be on the national elections, likely to take place in the first half of 2019. Though it is changing slowly, up to now, voting has largely been along racial lines. The ANC is officially "multiracial,” but it has been the party of choice for the eighty percent of the population that is black and mostly poor, and therefore, since 1994, has dominated the country’s politics. Even if the commission's findings do not translate into opposition votes, it will promote government transparency and the rule of law. 

A growing number of actors have joined the fight against dirty money. The success of global efforts to combat illicit financial flows, however, remains uncertain. 

On October 9, President Cyril Ramaphosa accepted the resignation of Nhlanhla Nene as finance minister. Critics are accusing Nene of lying about the frequency of his contacts with the notorious Gupta family, which is now being investigated for “state capture.” He is also accused of somehow facilitating a deal involving his son, a Mozambican refinery, and a state financing agency. For his part, Nene has apologized for understating the number and location of his meetings with the Guptas, but has denied any involvement in his son’s businesses. He has been not been charged with any wrongdoing so far.  While finance minister under former President Jacob Zuma, Nene countered successfully the erstwhile president’s efforts with the Guptas to fund a poorly conceived nuclear power initiative—from which it is likely they would have personally benefited. Further, Nene has provided devastating testimony about Zuma and the Guptas before the current Judicial Commission of Inquiry into State Capture, known as the Zondo Commission. Nene was regarded as a “white hat” during the dark days of Zuma's administration, and was eventually fired in 2015. But Ramaphosa’s enemies within the ANC, as well as in the opposition Democratic Alliance (DA) and Economic Freedom Fighters (EFF), put intense political pressure on Nene to go once he acknowledged the full extent of his meeting with the Guptas. It is unclear what effect this will have on the ANC’s chances in the upcoming elections. Ramaphosa has launched an initiative, “New Dawn,” that looks to rejuvenate South Africa’s economy and clean up corruption within the ANC and state-owned enterprises. He is arguing to the electorate that the ANC is able to “self-correct,” and Nene’s departure strengthens this position. The DA and the EFF counter, arguing that there is no “good” ANC and “bad” ANC, but only one ANC, and that it should be voted out of power. The accusations against Nene would appear politically to have undercut the credibility of Ramaphosa’s anti-corruption policies, even though Nene’s sins appear venial, if indeed they exist at all. Ramaphosa also faces opposition within the ANC. Zuma still has supporters within the party, reflecting at least in part his success in building patronage networks. Some of them stand to lose from Ramaphosa’s anitcorruption drive, and they likely applauded Nene’s departure. In Nene's place, Ramaphosa appointed Tito Mboweni as the new finance minister. He was the first black governor of the South African Reserve Bank, holding the post from 1999 to 2009. During his tenure, he increased South Africa’s reserves from $10 billion to $40 billion. He later worked for Goldman Sachs and served on various corporate boards. He is not expected to change Nene’s policies significantly, and business confidence in him is reflected in the recovery of the Rand after falling with Nene’s departure. Although Mboweni apparently supported Ramaphosa’s chief rival, Nkosazana Dlamini-Zuma, in the 2017 ANC leadership race, his presence in the cabinet is likely to strengthen Ramaphosa’s hand.  The Nene episode shows that Ramaphosa takes seriously attacks on the credibility of his reform program, especially as the elections draw nearer. Nene, a reformer himself, likely did not want to jeopardize Ramaphosa's efforts against corruption. Hence his resignation. (Especially under Zuma, ministers were fired rather than resigning.) Ramaphosa may well bring Nene back into his administration after the elections conclude.

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The New York Times has published a long article on internecine murder within South Africa’s ruling African National Congress (ANC). The victims are mostly local politicians, typically rivals of those entrenched in the party’s machinery and its corruption, and killings take place mostly in rural KwaZu-Natal. During the nine years that Jacob Zuma led the party and was chief of state, portions of the ANC increasingly came to resemble a criminal conspiracy. In some ways, the current round of killings resembles a feud among Mafiosi. Crispian Olver, once an ANC operative, in How to Steal a City: The Battle for Nelson Mandela Bay, profiled ANC political corruption in Port Elizabeth, located in the Eastern Cape. KwaZulu-Natal is Zuma’s political base, and he remains active there. He reportedly has been seeking to sabotage his successor, President Cyril Ramaphosa. His fellow Zulus are about a quarter of South Africa’s population and a large majority of the population of KwaZulu-Natal. Zuma is especially strong in the rural areas, where he has allied himself with the Zulu king, Goodwill Zwelithini. Zuma is increasingly the voice of traditional, nativist rural dwellers opposed to the de-tribalized, urban, and modern elements of the ANC led by Ramaphosa. KwaZulu, which was later incorporated into the province of Natal in 1994 to form Kwazulu-Natal, was a self-governing homeland under apartheid, and has long been violent. During the dismantling of apartheid and the run-up to the country’s first non-racial election in 1994, there was a veritable civil war in the homeland between the ANC, led by Zuma, and the rival Inkatha Freedom Party, led by Mangosuthu Buthelezi, and probably egged on by the apartheid security services. After the end of apartheid, Zuma and the ANC became dominant in the province and his new ally, King Zwelithini, was a rival of Buthelezi in Zulu politics. KwaZulu in some ways resembles Native American reservations. The land is under the control of a tribal trust that in turn is run by the obscurantist king. Within the tribal trust territories, there is no fee-simple ownership of land, and farmers have no security of tenure, reinforcing the political power of the king. Ending this system has long been a goal of those who advocate land reform, along with the push to increase black ownership of land. Despite the image of Nelson Mandela, internecine violence was also characteristic of the ANC during the struggle against apartheid. It was especially notable in ANC fighter camps outside of South Africa, where “apartheid spies” were murdered with no due-process and with the suspicion of trumped-up charges by political rivals. Jacob Zuma, chief of ANC intelligence in Zambia, has been linked to such murders, but he has never been tried or convicted.  Violence between members of the ANC in rural KwaZulu-Natal occurs far away from modern, sophisticated Johannesburg, Cape Town, and even nearby Durban. The internal politics within the ANC is therefore understandably very different in these urban areas from what goes on in rural areas. In so many ways, South Africa is a developed country with a modern infrastructure, the rule of law, and strong protection of human rights on the one hand, and a developing country on the other. For example, the constitution has sweeping guarantees of the equality of women, while King Goodwill tries to enforce patriarchy within his dominions. To an extent, Ramaphosa is caught in the middle as he prepares for elections in early 2019. To preserve its parliamentary majority, the ANC is dependent on its rural base—and on KwaZulu-Natal. Hence, his critics credibly claim, his reluctance to clamp down on the ANC there.  

U.S. administration is coming out on the wrong side of anti-corruption and migration in the hemisphere, with potentially lasting consequences for U.S.-Latin American relations.

Recent news out of Angola has raised the stakes in new President Joao Lourenco’s push to differentiate his tenure from that of his predecessor. Though he became president in September 2017, it was not until a year later that Lourenco assumed control of the ruling party, the Popular Movement for the Liberation of Angola (MPLA), significantly bolstering his authority in a country where the distinction between the party and the government has never been entirely clear. The world got a hint of how he intends to use his newly consolidated power last month with the arrest of Jose Filomeno dos Santos, son of former President Jose Eduardo dos Santos, whose tenure in office lasted thirty-eight years.  The younger dos Santos had served as the chair of Angola’s sovereign wealth fund until January, when he was removed in the wake of reports regarding inappropriate payments to the fund’s asset manager. (His sister, Isabel dos Santos, was removed from her position at the head of the state oil company, Sonagol, last year as well.) By March he was facing criminal charges, stemming from allegations of an illicit transfer of half-a-billion dollars from Angola’s central bank to an account in the UK. His arrest, along with others in recent days including that of a former transportation minister and the head of the Eduardo dos Santos Foundation, suggest that Lourenco is committed to a public and dramatic break from the past.  But it remains to be seen what kind of change is in store for Angola. For many years, the dos Santos family seemed inseparable from the MPLA, which derived its legitimacy not just from the party’s history of resistance to Portuguese colonialism, but also its ultimate victory in the long civil war that ended in 2002. That the MPLA drove out the oppressors and ended the war was enough for a time. It is not enough anymore.  With a majority of Angolans too young to remember personal experiences of the war, President Lourenco may be working on a new narrative about legitimacy in Angola, one in which leadership is based on taking on some of the country’s endemic corruption and lifting more Angolans out of poverty. But he must contend with a party and governing structures that were not created for these purposes, and with elites threatened by change. Whether he will undertake a transformational project or simply replace the old guard with his own loyalists will be determined not simply by his intentions, but also by the capacity of the MPLA to reform, and the degree to which Angolans themselves demand fundamental change.

Chidi Odinkalu and Ayisha Osori have published a book in Nigeria that says Obasanjo and his associates and supporters essentially stole $500 million to fund the incumbent’s efforts to amend the constitution so that he could run for a third term. The authors are both highly credible human rights lawyers. Among other things, Odinkalu is the former head of the Nigerian Human Rights Council and Osori is the former CEO of the Nigerian Women’s Trust Fund. The title of their book is Too Good to Die: Third Term and the Myth of the Indispensable Man in Africa. It is widely understood that former President Olusegun Obasanjo sought to change the constitution so that he could run a third time for the presidency in 2007, but Obasanjo has always denied that was his intention. In any event, the effort to change the constitution generated widespread opposition, and eventually was defeated in the National Assembly. Obasanjo supported his party’s successful candidate, Umaru Yar’Adua, for the presidency. Since he left office, former present Obasanjo has remained active politically, though his influence has declined. Politics everywhere can be expensive—the U.S. presidential election in 2008, including primaries, cost $2.8 billion. But, according to the book, among the sources of the $500 million illicitly used in Obasanjo’s failed third-term bid was the Excess Crude Account, a sovereign saving account funded by the difference in the world oil price and the price upon which the national budget was based. When the “Third Term Agenda” was at its high point in the mid-2000s, oil prices were high and the account was growing. Odinkalu and Osori also show that during his eight years in the presidency, Obasanjo exercised sole control over the national oil company, the Nigeria National Petroleum Corporation (NNPC). Nigeria’s oil and gas is produced through joint ventures or joint agreements between the NNPC and private oil companies. The Nigerian government receives the lion’s share of the profits, which in turn make up the majority of government foreign exchange. Some of the commentary in the Nigerian media on Odinkalu and Osori’s book makes the point that in some ways, Obasanjo’s administration was a continuation of the way things were done during the generation of military rule when public funds were used for political purposes. The Obasanjo administration, ostensibly a civilian government, was in fact a transitional episode between military and civilian ways of governing, and not just with respect to oil. For example, Obasanjo on occasion ignored Supreme Court decisions that he did not like, as had his military predecessors. His successor, however, obeyed Supreme Court decisions, as have subsequent presidents.  

Equatorial Guinea’s Teodoro Nguema Obiang Mangue (nicknamed Teodorin), vice president of Equatorial Guinea, son of his country’s president, and heir apparent to that office, made headlines this week. According to media reports, authorities in Brazil seized some $16 million in cash and high-end watches from his delegation, where he had reportedly traveled for medical treatment. Brazilian law limits the amount of cash visitors can bring into the country to $2,400.  This sort of awkward international incident is not particularly novel for Vice President Obiang. In 2016, Swiss authorities seized eleven of his luxury cars as part of an investigation into corruption and money laundering that culminated in his conviction for embezzlement, in abstentia, in a Paris court last year. In 2014, he resolved the U.S. Justice Department’s charges that he used his country’s public funds for private gain by reaching a $30 million settlement with federal authorities, requiring him to sell his Malibu mansion, a Ferrari, and some of his Michael Jackson memorabilia. None of these previous brushes with the law seem to have cramped the vice president’s style, much of which he documents on Instagram.  The lavish lifestyle, luxury goods, and very public nature of Teodorin Obiang’s wealth echo the habits of his father, who has ruled his small, oil-rich country for a jaw-dropping thirty-nine years. They may be about more than champagne tastes. To some degree, they are about showmanship, and a performance of power meant to establish his place in a hierarchy. With each outrageous extravagance, a message is being sent—he is formidable, to be feared and obeyed, and legitimately in a position of authority.  Of course, political leaders wielding flashy trappings of wealth as personal hallmarks are no strangers to more powerful countries like the United States. But in a place like Equatorial Guinea, where despite an extraordinarily high GDP per capital over three quarters of the population lives in poverty, it may be especially important as a leadership style. Equatorial Guinea’s governing authorities have proven adept at suppressing dissent but not at the most basic service delivery. Connective tissue between popular demand and government priorities is nearly nonexistent. It may be that making extraordinarily ostentatious acquisitions is simply what it means to wield political power in the context the Obiang dynasty has created, one that is devoid of democratic or legal accountability. A degree of notoriety for corruption is beside the point. 

Education in Nigeria is in dire straits, and many Nigerians are acutely aware and concerned. At present, Nigeria has the highest percentage in the world of children not enrolled in school, and it is much higher in the north of the country than in the south. Overall, the UN Human Development Index ranks Nigeria 152nd out of 188 countries. In the north, up to 12 million are enrolled in madrassas which do not prepare them to participate in a modern economy and are generally outside of government oversight. Public education is chronically underfunded. For countries seeking to develop rapidly, a UN agency recommends countries spend 25 percent of their national budget on education, as they do in Ethiopia; for Nigeria, the 2018 figure is 7.1 percent. During his visit in March, Bill Gates chided officials for underinvestment in human capital. But, education expansion and reform is not easy. The education function is divided between federal, state, and local governments. As with other aspects of national life, corruption is said to be ubiquitous. Teachers often go for long periods without being paid, and strikes, especially at the university level, are frequent. At independence and shortly thereafter, the Nigerian educational system was among the strongest in Africa. As with so many other elements of national life, the long period of military rule—from 1967 to 1998, with a brief civilian interregnum—blighted education. Military governments viewed educators, especially at universities, as potential opposition. As in other developing countries, the popular demand for education is strong. Accordingly, successive military governments expanded the number of universities while never providing sufficient funding. This process continued after the restoration of civilian government in 1999, where states established universities, usually with inadequate funding. At the primary and secondary level, education had largely been in the hands of missionaries. But, in the aftermath of the civil war, the military government closed church schools (and hospitals) and “nationalized” them, to the detriment of their quality. The civilian government of President Olusegun Obasanjo in 1999 permitted the establishment of private universities under the supervision of the Ministry of Education. Since then, seventy-four have been established that were open as of 2017. Most have church affiliations of some sort, and most are in the southern part of the country. However, the American University of Nigeria is secular and is located in Adamawa state in the north. (I am on the board of the American University of Nigeria.) The quality of many of the private universities is high, but there are tuition charges, while the public universities are largely free. There are now many private primary and secondary schools, and they educate the majority of students in Lagos state.  As with other aspects of Nigerian life, traditional state functions, such as education, are becoming privatized. There is a clear hierarchy. Wealthy Nigerians send their children abroad to Ghana or elsewhere, less wealthy ones send them to private schools through the university level, while the poor—the overwhelming majority of the population—are dependent on state facilities.   

Panelists at CFR roundtable Corruption, Gender Inequality, and the #MeToo Movement addressed the need to mainstream gender into anti-corruption efforts and discussed the impact of gendered forms of corruption, such as “sextortion”—a term that describes the abuse of power to obtain sexual benefits.

Latin America’s judiciaries are engulfed in corruption scandals. In Colombia a former Supreme Court member was arrested on charges of corruption and bribery. In Peru multiple judges stand accused of trading favorable rulings and shortened sentences for money and perks. In Guatemala, lawyers and justices face charges of rigging Supreme Court appointments. And in Mexico the attorney general's office fired one of its own for delving too deep into alleged bribes to the former head of the national oil company Pemex, a close confidant of President Enrique Pena Nieto. These acts, more than similar crimes by dirty politicians, undermine the region’s fragile rule of law, revealing deep-seated corruption among those responsible for holding others to account. They show that the widespread legal reforms of the last two decades, while necessary, weren’t enough. The next essential step is professionalizing the judiciary itself. Argentina, Chile, Colombia, Mexico, Peru, Uruguay, and others have overhauled their legal systems, introducing oral trials, arbitration, and mediation alternatives, and strengthening due process and the presumption of innocence. As part of larger shifts from inquisitorial to adversarial systems, these efforts have begun to make justice more transparent, effective, and fair. Many Latin American countries have also passed specific anticorruption measures. Brazil criminalized bid-rigging, bribery, and fraud in public procurement. Argentina outlawed nepotism, and along with Peru and Colombia upped the penalties for corporate bribery. Mexico created a new national anti-corruption system, explicitly outlawing bribes, embezzlement, and the failure to disclose conflicts of interest, and creating a dedicated prosecutor to go after perpetrators. Legislators also gave prosecutors new corruption-fighting tools. Brazil’s successful Lava Jato (Carwash) investigations, leading to more than 200 convictions of politicians and business leaders for bribery and kickbacks, including former president Luiz Inacio Lula da Silva, have hinged on plea bargaining, introduced to the fight against organized crime by a 2013 law. Nearly a dozen nations in the region claim similar statutes that enable court officials to ease sentences in exchange for information on accomplices and higher-ups. Yet as the ongoing wave of scandals attests, beyond new laws Latin American nations need judges and lawyers able and willing to wield them. This in turn requires a professional legal bureaucracy. Although harder to conjure than legislation, a qualified civil service is possible to build. Look, for instance, at Chile and Brazil. Chile has a long history of meritocratic public hiring, drawing on credentials and examinations rather than party links. Attesting to the respect afforded their profession, judges, like other bureaucrats, often come from well-heeled families and elite schools. In the wake of Chile's own corruption scandals, one involving former president Michelle Bachelet's son and daughter-in-law, the government expanded efforts to inculcate legal impartiality and professionalism beyond just the courtroom, introducing civic and ethics education to elementary schools nationally. Brazil’s merit-based system for choosing most judges and prosecutors was inscribed in its 1988 Constitution. Over the last 30 years its judicial core has evolved, the politically appointed judges of the past retiring and their replacements rising up through the new technocratic process. Judge Sergio Moro of Lava Jato fame is but one of these new professionals, respected and well remunerated for their technical acumen and political autonomy. Throughout the region citizen anger over corruption is growing. Promises to take on widespread graft helped to catapult Mexico’s president-elect Andres Manuel Lopez Obrador to a historic victory. Corruption preoccupied Colombians heading to polls last spring, and ranks high among voter concerns in Brazil’s upcoming presidential race. In Peru it brought down the previous president and threatens the current head of state, Martin Vizcarra, if he can’t harness the momentum to his cause through a pending referendum. Yet what Latin American leaders must now do is to change career incentives, ensuring that judicial robes aren’t bought but earned, and that merit trumps connections. They need to create respected and rewarding professional paths, enticing the talented and ambitious to the fight against corruption rather than succumb to its temptations. Brazil and Chile show that changing the makeup of the justice system is possible. But a process that takes a generation will surely test the patience of Latin America's voters. View article originally published on Bloomberg.