Killer Corruption
COVID-19 is a ticking time bomb in Africa. Some of the risks
are widely documented. Health-care systems are weak and overburdened , with ten
African countries reportedly having no ventilators at all . Food supplies are
unstable, and have already suffered major disruptions. And over 18 million
people are refugees or internally displaced, leaving them especially
vulnerable. But another major obstacle to effective COVID-19 responses is being
largely overlooked: widespread corruption.
The international community is stepping up to help Africa
fight the pandemic. The International Monetary Fund has suspended 25 (mostly
African) countries' debt payments for the next six months. The World Bank Group
is making available a package of up to $12 billion in immediate support to
assist developing countries in coping with the outbreak. Billions of aid
dollars will be allocated to Africa.
Yet, according to the United Nations Office on Drugs and
Crime, up to 25% of global procurement funding is lost to corruption. Such
losses are prevalent in many African countries, where senior government
officials and their international collaborators have used public policy and
resources to enrich themselves.
Donated medicines intended for the poor have been stolen and
resold for profit. Government procurement contracts have been manipulated and
misused . Foreign-aid disbursements have been diverted to private accounts. In
late March, a former health minister in the Democratic Republic of the Congo
was sentenced to five years of forced labor for embezzling more than $400,000
from the DRC's funds earmarked for responding to Ebola.
Most corrupt officials and business leaders, however, never
see the inside of a prison cell. For them, stealing money meant for vulnerable
populations is business as usual, and, given their powerful connections,
punishment is often the furthest thing from their minds.
This may be all the more true during the COVID-19 crisis,
because movement restrictions and office closures have hamstrung the
anti-corruption work of oversight bodies, activists, and the press. If action
is not taken soon, many African countries may face sharply higher death rates,
not only from COVID-19, but also from inadequate economic support and social
protections.
Avoiding this outcome hinges on the credible threat of
punishment for anyone caught stealing funds or otherwise disrupting COVID-19
response efforts for their own gain. Fortunately, mechanisms for doling out
such punishments already exist: an array of tried-and-true financial policies
by governments, multilateral institutions, and banks around the world.
In the United States, the Global Magnitsky Human Rights
Accountability Act gives the Treasury Department's Office of Foreign Assets
Control (OFAC) the authority to impose sanctions on anyone who engages in
public-sector corruption. Stealing, diverting, or obstructing resources meant
for the COVID-19 response would fall neatly into this category.
OFAC has a truly global reach: given the US dollar's global
primacy , the vast majority of international financial transactions touch the
US financial system. As a result, OFAC can effectively cut off entities from
the international financial system.
The Financial Crimes Enforcement Network – the Treasury
Department bureau tasked with combating domestic and international money
laundering, terrorist financing, and other financial crimes – also has a key
role to play. FinCEN advisories give banks guidance on filing
suspicious-activity reports, which financial intelligence units can use to
pursue corruption investigations. During the COVID-19 crisis, FinCEN can issue
an anti-money-laundering advisory, warning banks worldwide to strengthen due
diligence on suspicious financial transactions related to emergency
public-health responses.
Likewise, banks operating in Africa can independently
enhance their risk-assessment frameworks and transaction screening, in order to
detect suspicious activity in pandemic-related funding streams. Since banks
already screen for financial crimes, they would merely have to broaden their
focus to suspicious activities involving senior government officials, companies
in public-health procurement, and the broader health sector.
The Egmont Group of global financial intelligence units, of
which FinCEN is a member, can collaborate to investigate diversions of
public-health funding by corrupt actors. Although siphoned money usually
crosses borders, the Egmont Group's information-sharing agreements help to
overcome this hurdle, facilitating international investigations.
Meanwhile, governments and financial institutions should do
more to support the African civil-society groups, responsible businesses, and
concerned officials who raise red flags and blow whistles on corruption. The
evidence that these actors collect will facilitate legal action against
networks of corrupt officials and businesspeople.
These solutions are not just theoretical; they have been
used in South Sudan and the DRC, with encouraging results. The Israeli diamond
dealer Dan Gertler made millions looting the DRC's natural resources thanks to
deals with corrupt officials, and laundered the money through the international
banking system. But – armed with investigative dossiers by The Sentry (of which
I am a co-founder with George Clooney), reports by Global Witness , and the
work of investigative journalists – the US imposed sanctions on Gertler and his
global network.
In South Sudan, anti-money laundering advisories from the US
and UK governments have made moving the proceeds of corruption through the
international financial system much more difficult. In fact, sanctions placed
on key government officials and their commercial facilitators in the country –
combined with those anti-money-laundering measures – have helped to push
warring parties toward peace.
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