African Democracies Are Indeed Tragic – Corruption - XXVIII

Sun, 11 Dec 2011 Source: Tsikata, Prosper Yao

• Corruption Getting Worse Under NDC

• The Woyomes’ PANDORA BOX

• Israel’s Former President, Mosha Katsav, Jailed

• Former Governor Rod Blagojevich Jailed

We have been told again and again that political corruption is the bane of Africa’s development. While the assertion is accurate, it is also recognized that the type of corruption in which African countries are implicated, just like anywhere else in the world, involves intractable networks with multiple players at various societal levels – there are principal culprits, abettors, underlings, international collaborators, and whole institutions, among others.

From the international financial havens (call them destinations for loot, if you want) in Switzerland to allegations of corruption in the judiciary, the legislature, and the executive in many African countries including Ghana, it has become obvious that the notion that a change of government could bring about accountability is fast becoming a mirage. It is easier to campaign on the back of corruption to win votes, simply because the poor whose taxes are being exploited by the rich and the powerful in society abhor it, but the political will wanes for obvious reasons after winning power. When this happens, corruption only festers and become endemic making it embedded in every aspect of a country’s life, and concomitantly undermines the progress of the people. This section examines the canker from the international levels before drawing down to the local situations.

International Kleptocracy

What beats reason is that instead of the much needed capital flowing to the African continent to spur its development, it is rather leaving the continent for Europe and more developed countries. Africa is the most capital-scarce continent, but this becomes dramatically more pronounced when capital is separated into its private and public components. In a successful region such as East Asia there is more than twice as much private capital as public capital; for Africa, the reverse is true. While private businesses find both scrupulous and unscrupulous means to repatriate profits back home, monies from aid, taxes, and kickbacks, using public office as conduits, find their way to the world’s financial centers. So while a meager capital flows into the continent, much of her capital is outward bound, most of it being hidden owing to its illegality. It is called capital flight. By 1990, 38 % of Africa’s wealth was held abroad, higher than any other region in the world.

Interestingly, a people comparison between those who make the list of the biggest customers of some of the secret financial havens of the world depicts a very ironic picture. The names of Bill Gate, Warren Buffet, and Donald Trump, foremost American entrepreneurs, not Bill Gate, George Bush, and Barack Obama, would make sense here. The latter group, being politicians, are nowhere near the mammoth wealth of the former, being entrepreneurs of their generation. But the obverse is true in most African countries. The leaders of many of these poor countries are themselves among the world’s superrich and some of the biggest customers of the so-called financial havens.

In some cases, leaders from some of these poor countries are richer than the countries they lead. One cannot gloss over the name of the late leader of the former Zaire, now the Democratic Republic of Congo, Mobutu Sese Seko in a discussion of this nature. His country was his cash cow. He milked it without nourishing it; so when the cow became emaciated and turns its anger on the herder, it did not only dispose the herder but plunged the whole ranch into a bedlam. Even when these monies are discovered and efforts made by “requesting” countries to “holders” to return them, these pleas fall on death ears or are stonewalled by the “holder” countries. After the death of Mobutu Sese Seko of the Democratic Republic of the Congo or the former Zaire, billions of dollars looted from Zaire by the late President were tracked to Swiss secret accounts. A whooping US$5 to 6 billion was estimated to have been stashed away by the flamboyant kleptocrat. Interestingly, only 300 miles of road were tarred in that country by the time of his death. Similarly, Abacha’s stolen wealth was also traced to accounts in the same country. But due to the secrecy codes of Swiss banks, it has been very difficult for requesting African countries to retrieve their stolen wealth from the keepers of the loot.

In the United States it came to light in 2004 that Riggs Bank, in Washington, D.C. was holding huge deposits from the President of Equatorial Guinea with officials of the bank writing cringingly effusive letters of encouragement to the plunderer [urging him on to save more]. As soon as the matter came to light it was stopped and the bank radically reorganized. Interestingly, these are the very countries that turn around to churn out corruption indexes each year accusing African countries and their leaders of being corrupt when they are themselves abettors of these corrupt acts.

Until recently, if a French company bribed a public official in a developing country, the payment was tax deductible in France. French taxpayers were indirectly subsidizing bribery. But it did not apply in France. If a French company reported that it had bribed a French politician, the consequence would have been a criminal investigation, not a reduced tax bill.

However, recent developments in international circles give some glimpse of hope to countries whose citizens might have stashed their state funds in personal offshore bank accounts. Nonetheless, whether African countries would also have the guts to stand up to the Swiss authorities and other global financial centers outside the continent remain to be seen.

In a recent suit in Florida, the Internal Revenue Service and Justice Department in the US were seeking to compel the Swiss bank, Union Bank of Switzerland (UBS) to hand over the names of 52,000 U.S. taxpayers with private-banking accounts in Switzerland. According to an affidavit filed with the court by the Swiss tax authorities, the summons "does not identify any facts that could be construed as constituting tax fraud or the like, but rather makes a broad demand for the identity of all U.S. taxpayers for which certain forms have not been filed." There is suspicion some Americans have evaded tax and shipped their monies abroad to banks with high levels of secrecy. But in hard economic times, with America seemingly not been able to find answers to its own domestic economic problems, it is keen on tracking some of these financial resources.

As usual, the US-Swiss treaty on sharing tax information, which is said to date back over 30 years, has been advanced by the Swiss side as a bulwark to frustrate any attempts at seeking out individuals who might have infringe on tax edicts of the United States. But this is where it matters most. As the Swiss authorities tried to hide behind the cloak of US-Swiss treaty to seal off their world of secrecy from a prying Big Brother, the US threatened to use the Central Intelligence Authority (CIA) and the Federal Bureau of Investigations (FBI) to break Swiss secrecy codes if they continue to frustrate their attempts at accessing vital information on American citizens who have evaded tax and have deposits with the world’s most revered depositories for their secrecy. This effectively cowed the Swiss into submission - the Swiss are said to have released 5000 names to the Obama administration in 2010, presumably to avoid the invasion of their secrecy codes.

If this is the precedent, would the United States, lead the way by being benevolent enough to urge its own banks to return stolen monies deposited in its banks to poor African countries like Equatorial Guinea? If not, do African countries even have the leverage or will to request the Swiss and other depositories around the world to return their stolen wealth?

What is incredible is that in cases where information on these stolen monies become available and leadership of opposition parties or newly installed governments have been urged to expose these crimes and request the return of these monies, they grippingly show disinterest in pursing what have been plundered from their countries. The only conclusion the director of World Bank Communications, Dr. Sina Odugbemi, at a conference in Ohio University in April 2010, could draw from this development is that it is obvious political elites are mindful of the effects of some of these actions, which may predispose them to similar actions when they leave office one day. Therefore, the adage “scratch my back and let me scratch yours” and the “revolving door” politics is fast becoming the norm in many African countries, even those that have changed governments in the last few years.

The conviction once was that if anti-corruption institutions are failing in their duties, a change of government within the democratic dispensation offers a relief. The anti-corruption campaigns, as key political messages by opposition parties in many African countries including Ghana, offered that false expectation that a new administration would unearth some of the corrupt activities of previous regimes and ensure accountability, especially at the political level.

It is noted, however, that “even radical and peaceful change can prove disappointing. In December 2002, Kenya breathed a sigh of relief when the 24 year rule of Daniel Arap Moi ended peacefully. The new president, Mwai Kibaki, a former finance minister and vice president under the old regime, had allegedly changed his stripes.” Unfortunately, a couple of years into his presidency, April 2004, draft revisions to the constitution intended to curb the power of the presidency and the plundering of public assets were blocked by a faction close to the president. In July the same year, the British envoy to Kenya told businessmen that the new government had signed corrupt deals worth almost US$200 million. “Evidently the practitioners now in government have the arrogance, greed and perhaps a desperate sense of panic to lead them to eat like gluttons. They may expect we shall not see, or notice, or will forgive them a bit of gluttony because they profess to like Oxfam lunches. But they can hardly expect us not to care when their gluttony causes them to vomit all over our shoes," he said.

In Ghana, the issue of corruption had been one of the key election issues in the tightly contested election in 2008. The opposition NDC persistently accused the then ruling NPP administration of massive corruption. A plethora of government contracts, payments, and transactions involving both local and foreign companies were believed to have been shortchanged by the then NPP government officials and their underlings with the proceeds ending up in their personal bank accounts or those of their cronies. Watching the public accounts committee hearing in 2007, in Ghana, one got the impression that there was a bottomless abyss under her revenue vat, created by those charged with the responsibility of safeguarding her revenue mobilization, which is channeled into personal accounts and private pockets.

On the heels of that came the disclosures on how the NPP government obtained a loan facility of US$20 million dollars from India for the celebration of Ghana’s 50th independence anniversary celebration. This amount excluded components of local contributions from individuals and corporate organizations. The secretariat had reportedly spent US$60 million and was still in arrears of US$18 million two years after the celebrations. Disgruntled insiders continuously leaked information to the then opposition NDC about how resources made available to the body tasked - Ghana @ 50 - to oversee the yearlong celebration were being diverted into private pockets. By the end of the festivities, the expenditure incurred stood at US$78 million against the US$20 million approved by Ghana’s legislative body. Armed with these pieces of information and other colossal scandals like the carting away of 2 tons of cocaine from police exhibit room at the police headquarters in Accra, the capital, the opposition NDC continued to harmer on corruption as its key campaign message. The message sunk so deep that even the media gatekeepers who had been on the payroll of the NPP government since it took office could not do the damage control. Indeed, if the election had been a media war, the NDC obviously would have lost it even before the contest started. There were systematic attempts at every twist and turn to malign the opposition party and its leadership by some known media outlets. But this goes to underscore the fact that audience come to the media with their own backgrounds and views and the media only helps them to reinforce those views, as the cultural theorist argue. The issue of corruption made the government more and more unpopular among Ghanaians. The message sank so well that the NDC won the election 2008.

Although it is yet unknown whether any of her leaders, past and present, have stashed off public resources away in Swiss banks, there are no doubts about massive looting of the state coffers. The Justice Douse Commission, a commission set up by the NDC government upon assumption of office speaks volumes of that. Two important findings will bring the reader to this understanding. First, the auditor general’s report revealed that “neither staff nor records to assist in the auditing were available, and the Auditor General’s Department had to put receipts and payments together to determine whether there was value for money.” Practically, only one out of 25 public toilets for which an amount of GH 19 million, an equivalent of US$19 million, was allocated had been provided two years after the celebrations.

This was happening in a country where there are large numbers of unemployed individuals with finance and management degrees who could ensure the right things were done. But it goes to the very roots of the problem. When you employ family members and cronies who lack the expertise needed for these jobs, the outcome is gross indiscipline in the management of state resources. Since there were no checks and balances and this pseudo-institution, like many others, was ran like a family business, the outcome was not unexpected.

It is said that the wheels of justice turn so slow. It is unlikely, after a change of government, that Ghanaians were expecting the government to bypass the law courts to dump alleged culprits in jail without due process. But Ghanaians expect due diligence by the government in investigating some of these cases and bringing offenders to book, no matter how long it takes.

At the congress that elected the flag-bearer for the main opposition NPP, Nana Akuffo-Addo, for the 2012 election, the immediate former Ghanaian president, John Agyekum Kufour, accused his successor’s administration of being corrupt. In the ex-president’s words, “Corruption is becoming incarnate. We see corruption everywhere.” To him corruption has resurged under Atta-Mills, as if under his administration corruption was extinct. This comment, however, sparked off a hail of fire from two overzealous government functionaries – a deputy information minister, Samuel Okudzeto and a presidential aide-de-camp, Nii Lamptey Vanderpuye – to the effect that they had discovered a can of worms on assumption of office but had been prevailed upon by the international community, in the supreme interest of peace, as it were, not to open it.

Similar responses were to come from the NDC Kwabena Mensah Woyome, MP for South Tongu, whose brother Alfred Woyome is being accused by the MP for Assin North, Ken Agyepong, of swindling the state to the tune of GHC42 million. The young Woyome talks about a PANDORA BOX that needs opening. May someone tell the MP to carry the PANDORA BOX to the courts? After all, that is what the courts are for. If he needs help with a porter, I am sure there are many in his village who do not even have safe drinking water who can carry the PANDORA BOX to the courts for a pittance.

This is against the backdrop that the NDC campaigned vigorously on the back of fighting corruption and was elected to do a solemn duty to Ghanaians by fighting the menace, it now turned around to point fingers at the international community for prevailing on it to halt a duty its leadership had promised, with an oath, to execute. The term international community has sometimes been used nondescriptly to mean nothing. Who is the international community? Is it supposedly London and Washington, or it does include the comity of nations, headquartered in New York? Are they not the very institutions that accuse African governments day-in day-out of corruption? Why would they now turn around to halt what would make Ghana corruption free? Are they complicit in the so-called can of worm of corruption in Ghana?

If the president’s aide-de-camp is supposedly the former’s confidante, then he must be speaking for the president, and the public must trust what he tells them. One would have expected the president to call his aide-de-camp to order or disassociate himself from the statement, but indeed he must have said exactly what the president was thinking. For the Woyomes and Agyepong, they are now on each other’s, so there is a PANDORA BOX that needs opening.

These episodes only underscore the fact that politicians in young democracies such as Ghana and elsewhere are waking up to the reality that with the democratic trajectory, no government has monopoly over power. There is, therefore, the tendency to believe that the corrupt people you haul before the courts may return to apply same measures to you, especially when corruption starts to raise its head in your own administration.

Beyond the hail of rebuttal, the question needs to be asked whether the former Ghanaian president was telling his countrymen something they needed to find out more about. Did he have any incriminating evidence against functionaries serving in the government of his successor or it is just a political rhetoric as usual? If he did, why did he not submit that to the police service he left behind in less than two years? This question arises especially when he has been telling Ghanaians to go to the police if they had any incriminating evidence against any of his officials, when he was a president.

Print a copy and enter a discussion with your neighbor on this…

The above-title is serialized into 30 articles covering issues of politics, corruption, education, migration, the economy (Ghanaian economy), unemployment, land tenure, dearth of policy innovation, and stories from the frontlines – Cote d’Ivoire, Kenya, ECOWAS and the AU. The series are syndicated and media houses/outlets interested in enriching the national debates in Ghana for the 2012 are free to publish all the series.

By: Prosper Yao Tsikata

Email: pytsikata@yahoo.com

Blog: http://theafricanmessenger.blogspot.com

Columnist: Tsikata, Prosper Yao