Note: In ongoing commentaries, the author examines the Obama Administration’s policy in Africa.
Moral Hazard and Moral Bankruptcy
The concept of ‘moral hazard’ in politics may be used to explain a situation in which a government is insulated and immunized from the consequences of its risky, reckless and incompetent behavior. For instance, a regime that is heavily dependent on the safety net of foreign aid, sustained infusion of multilateral loans and perpetual supply of humanitarian assistance will behave differently if it were left to its own devices to deal with the consequences of a mismanaged economy, debilitating corruption and proliferating poverty. Many African regimes today simply avoid the demands of good governance, ignore the rule of law and commit gross violations of human rights in the belief that Western aid, particularly American taxpayer handouts, will always bail them out of their chronic budget deficits and replenish their empty grain silos. Stated simply, Western taxpayer dollars provide the fail safe insurance policy for the survival and persistence of failed regimes in Africa.
By shifting the risk of economic mismanagement, incompetence and corruption to Western donors, and because these donors impose no penalty or disincentive for poor governance, inefficiency, corruption and repression, African regimes are able to cling to power for decades abusing the human rights of their citizens and stealing elections. Western donors continue to bail out failed African states for two reasons. First, the iron fisted African dictators make excellent business partners. Recent Wikileaks cablegrams have documented that the most important objective for Western policy makers in Africa is to support a strongman who can guarantee them stability so that they can continue to do business as usual. Basically, they want a “guy they can do business with.” Second, Western donors believe that the few billions of aid dollars given every year to guarantee “stability” in African countries is more cost effective than helping to nurture a genuinely democratic societies in Africa. The moral hazard in Western policy comes not just from the fact that they provide fail-safe insurance to repressive regimes but also from the rewards of increasing amounts of aid and loans to buffer them from a tsunami of democratic popular uprising. As we have recently seen with Ben Ali in Tunisia, Hosni Mubark in Egypt and Gadahafi in Libya, supporting “strongmen” in Africa will at best produce the illusion of stability, control and permanence for the West. But turning a blind eye to gross human rights violations and complicity in the denial of democratic rights to African peoples is irrefutable evidence of moral bankruptcy.
Obama’s Foreign Policy in Africa
In 2008, when then-Senator Obama was campaigning for the presidency, his advisor on Africa, Witney W. Schneidman, laid out the candidate’s fundamental policy objectives for Africa. Schneidman argued that “Barack Obama understands Africa and its importance to the United States” and “to strengthen our common security, we must invest in our common humanity.” Unquestionably, Senator Obama was a man of little talk and lots of action. He aggressively promoted human rights and accountability throughout the continent. He co-sponsored major legislation to help end genocide in Darfur (Darfur Peace and Accountability Act of 2006), vigorously advocated for a no-fly zone in Darfur (not so in Libya today), secured funds to facilitate free and fair elections in the Democratic Republic of the Congo, helped bring Liberian warlord Charles Taylor to justice and worked to develop a coherent strategy for stabilizing Somalia.
Senator Obama was a straight-talker. In 2006, he visited Kenya and “spoke truth to power” “about the corrosive impact of corruption.” He visited Kibera, Kenya, a 2.5 square kilometer tract of urban land and the second largest slum in Africa and home to an estimated 1.2 million people. He told the proudly delirious mass of poor people, “I love all of you, my brothers — all of you, my sisters”. He embraced the wretched of Kibera: “Everybody in Kibera needs the same opportunities to go to school, to start businesses, to have enough to eat, to have decent clothes.” After the 2007 Kenya elections, Senator Obama rolled his sleeves and for “18 months worked with the Kenyan leadership to help resolve the post-election crisis in that country.” He called out Robert Mugabe for stealing elections in Zimbabwe and condemned his gross human rights violations. In South Africa, he “demanded honesty from the government about HIV/Aids.” He went into “refugee camps in Chad, where he heard first-hand about the experiences of Sudanese women who had been forced from their homes and had their families torn apart, and worse, by Khartoum’s genocidal policies.”
In America, Senator Obama made a “strong effort to reach out to first, second and third generation Africans who have become American citizens to encourage them to be part of the effort that will elect Barack Obama president of the United States.” He actively sought the support of Ethiopians. His campaign specifically called on the “10,000 Ethiopian-Americans in Virginia to help turn that state blue on November 4th.”. On November 4, 2008, Ethiopian Americans came out by the tens of thousands and helped turn Virginia blue.
When Senator Obama became President, his “Africa Agenda” revolved around three basic objectives: 1) “accelerate Africa’s integration into the global economy”, 2) “enhance the peace and security of African states” and 3) “strengthen relationships with those governments, institutions and civil society organizations committed to deepening democracy, accountability and reducing poverty in Africa.” Over the past two years, what we have seen in Africa is a whole lot of deepening repression, human rights violations and corruption in Africa. We have seen very little “accountability, democracy building, the rule of law, judicial reform” and the rest of it.
Much to our dismay, upon becoming President Mr. Obama morphed from a “confrontor” to an accommodator of Africa’s notorious human rights violators. He began preaching and issuing moral pleas to “strongmen” in an effort to redirect them from their evil ways and be nice, and not nasty, to their peoples. From day one, President Obama began soft-pedaling. In his inaugural speech, his message to those stealing elections and committing crimes on their citizens was a bit disarming: “To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.” We thought promising rewards to practitioners of corruption and deceit was rather odd; but we deciphered the hidden message: If Africa’s dictators unclench their fists and became nice, American taxpayers will lay some cold hard cash on their open palms. In other words, it is possible to buy off these dictators into becoming nice guys.
In April 2009, President Obama told the Turkish Parliament that the “choices that we make in the coming years will determine whether the future will be shaped by fear or by freedom; by poverty or by prosperity; by strife or by a just, secure and lasting peace.” He told them that “freedom of religion and expression lead to a strong and vibrant civil society” and “an enduring commitment to the rule of law is the only way to achieve the security that comes from justice for all people.” In July 2009, in Ghana, President Obama went on the rhetorical offensive and told Africa’s “strongmen” that they have been driving on the wrong side of history for so long that they are headed straight for history’s dustbin. “Make no mistake: history is on the side of these brave Africans [citizens and their communities driving change], and not with those who use coups or change Constitutions to stay in power. Africa doesn’t need strongmen, it needs strong institutions.” In the same month, U.S. Secretary of State Hilary Clinton, in a major speech at Georgetown University, announced that the Obama Administration’s approach to “putting our principles into action” meant demanding accountability in American global human rights policy. She warned the world that “we must be wary of the steel vise in which governments around the world are slowly crushing civil society and the human spirit.”
In December 2009, Secretary Clinton offered further enlightenment on U.S. human rights policy: “It is crucial that we clarify what we mean when we talk about democracy, because democracy means not only elections to choose leaders, but also active citizens and a free press and an independent judiciary and transparent and responsive institutions that are accountable to all citizens and protect their rights equally and fairly.” She said the “first pillar” of this policy is “accountability”, which means “governments [must] take responsibility by putting human rights into law and embedding them in government institutions; by building strong, independent courts, competent and disciplined police and law enforcement.”
In April 2010, U.S. Assistant Secretary of African Affairs Johnnie Carson speaking at the Second Annual Africa Focus at Harvard University amplified on the meaning of accountability: “A key element in Africa’s transformation is sustained commitment to democracy, rule of law, and constitutional norms…. African countries need civilian governments that deliver services to their people, independent judiciaries that respect and enforce the rule of law, professional security forces that respect human rights, strong and effective legislative institutions, a free and responsible press, and a dynamic civil society.”
In May 2010, in a keynote speech at the 35-nation Organization for Economic Cooperation and Development in Paris, U.S. Attorney General Eric Holder railed against “corruption [which] weakens the rule of law, undermines the promise of democracy, imperils development and stability and faith in our markets.” In July 2010, Holder and Johnnie Carson, announced at the African Summit in Kampala, Uganda that the U.S. is launching a special Kleptocracy Asset Recovery Initiative to catch and prosecute corrupt foreign individuals and institutions operating in the U.S.
Egypt proved to be a test case for President Obama’s policy in Africa. In June 2009, in a speech given at Al-Azhar University in Cairo, President Obama told the young people of his
unyielding belief that all people yearn for certain things: the ability to speak your mind and have a say in how you are governed; confidence in the rule of law and the equal administration of justice; government that is transparent and doesn’t steal from the people; the freedom to live as you choose…. You must maintain your power through consent, not coercion; you must respect the rights of minorities, and participate with a spirit of tolerance and compromise; you must place the interests of your people and the legitimate workings of the political process above your party.
In February 2011, when Egyptian students took the streets seeking to remove Mubarak after three decades of rule by state of emergency and replace it with a “government that is transparent and doesn’t steal from the people”, President Obama was visibly hesitant and wavering. He seemed to stand aloof and not with the young people of Egypt making history. He waffled on the issue of Mubarak’s departure from power and could only offer abstract moral exhortations against “violence” while calling for an “end to the harassment and detention” and the need to create a “process that is broadly inclusive of the Egyptian opposition.” Only after Mubarak took off for Sharm-el-Sheikh did President Obama step forward to take a stand: “For in Egypt it was the moral force of nonviolence, not terrorism, not mindless killing, but nonviolence, moral force that bent the arc of history toward justice once more.” He was effusive in his praise of Egyptian youth: “It’s [Egypt’s] young people who’ve been at the forefront. A new generation, your generation, who want their voices to be heard….America will continue to do everything that we can to support an orderly and genuine transition to democracy in Egypt.”
Backing Up Talk With Action
President Obama is a source of great pride for Africans on the continent and others scattered in the Diaspora. That pride carries with it extraordinarily high expectations for U.S. policy in Africa. His writings and speeches demonstrate that he is very knowledgeable, well-informed and passionate about Africa; and his African ties are deep, strong and genuine. His involvement with Africa dates back to his student days in the early 1980s at Occidental College in California protesting apartheid. Africans would like to seek qualitative changes in U.S. policy towards Africa.
The President’s Africa policy pivots on a strategy of “constructive engagement” of African “leaders”. One cannot clap with one hand alone. There is overwhelming evidence to show that most African leaders are only interested in clinging to power cushioned by the financial support of American taxpayers. They are not interested in engaging America on what matters most to Americans – democracy, freedom, human rights, the rule of law, accountability, transparency and the like. President Obama, on the other hand, has partners right here in the U.S. of A who are willing to engage him on issues of democracy, freedom and human rights in Africa. They are the tens of thousands of Ethiopians who helped turn Virginia blue for him; they are the multitudes of Nigerians in Ohio and Somalis in Minnesota and other Africans throughout the U.S. who opened their wallets, canvassed the precincts and stood in line for hours that cold November morning in 2008 to make Senator Obama President Obama. Democracy, freedom and human rights in Africa cannot be subordinated to the expediency of “engaging” incorrigible African leaders whose sole interest is in clinging to power to enrich themselves and their cronies. Like charity, we believe, constructive engagement should begin at home.
The weekly commentaries of the author are available at: http://www.huffingtonpost.com/alemayehu-g-mariam/
By Alemayehu G. Mariam
Note: This is the fourth installment in a series of commentaries I intend to offer on U.S. foreign policy (or lack thereof as some would argue) in Ethiopia. In this piece, I argue that the Obama Administration’s recently announced Kleptocracy Asset Recovery Initiative to go after corruption in Africa and elsewhere could prove to be an extraordinarily effective tool to improve human rights on the continent. By focusing on corruption, the Obama Administration could reasonably demand good governance practices of African “leaders” while maintaining cooperation on counter-terrorism and security issues.
The Africa Kleptocracy Project
In June 2008, when presidential candidate Barack Obama was a few months away from electoral victory, I warned those dictators who survive by pickpocketing the American tax payer of the arrival of a “new sheriff” in town and advised them to clean up their acts and “shape up”: “A new sheriff is coming to town. He does not carry a six-shooter but carries a law book. And he’s laying down the law for all the tin-pot dictators of the world.” In April 2009, I “read the tea leaves” again and urged Africa’s panhandling dictators to “ride out before the big roundup” because the “new sheriff and posse are in town.” I am glad to say I read the tea leaves just right.
Barack’s Posse was a little late but finally showed up in Kampala, Uganda last week to lay down the law to Africa’s top kleptocrats (thieves masquerading as “heads of state”) gathered at their annual summit. President Obama’s “undersheriffs”, Attorney General (A.G) Eric Holder and Johnnie Carson, U.S. Assistant Secretary for African Affairs, told the huddled kleptocrats that a special Kleptocracy Asset Recovery Initiative (KARI) has been established in the U.S. Justice Department to recover the money they and their criminal cohorts have stolen from their citizens and restore it to its intended use:
I am pleased to announce that the U.S. Department of Justice is launching a new Kleptocracy Asset Recovery Initiative aimed at combating large-scale foreign official corruption and recovering public funds for their intended – and proper – use: for the people of our nations. We’re assembling a team of prosecutors who will focus exclusively on this work and build upon efforts already underway to deter corruption… I know that prosecution is not the only effective way to curb global corruption. We will continue to work with your governments to strengthen the entire judicial sector… We must also work with business leaders to encourage, ensure and enforce sound corporate governance. We should not, and must not settle for anything less… As many here have learned — often in painful and devastating ways — corruption imperils development, stability, competition and economic investment. It also undermines the promise of democracy… Like President Obama, I believe that the 21st century will be shaped by what happens here in Africa. Your security and prosperity, the health of your people and the strength of your civil society, will have a direct and profound impact on the world’s communities and on the advancement of human rights and human progress everywhere.
A couple of months ago, A.G. Holder addressing the 35-nation Organization for Economic Cooperation and Development in Paris said:
Put simply, corruption undermines the promise of democracy. It imperils development, stability and faith in our markets. And it weakens the rule of law. Corruption erodes, even destroys, the faith of citizens in their governments. As I speak, a corrupt official somewhere is enjoying undeserved and illegal proceeds. He may be driving a brand-new luxury car. She may be filling her off-shore bank account with tainted cash. They may be traveling first-class on all-expenses-paid holidays. Bribery in international business, for example, may center on shell companies and wire transfers, but no matter where — or how — it happens, the corrosive result is the same: stymied development, lost confidence and distorted competition. The result is unfairness, not justice; the consequence is economic decay, not development.
African Kleptocrats as Organized Criminals (Mafia)
In my commentary “Africorruption, Inc.”, I argued that the business of African governments is corruption. In other words, the majority of African “leaders” seize political power to operate sophisticated criminal enterprises to loot their national treasuries and resources. President Obama’s approach to dealing with corrupt African governments is consistent with the informed view that corruption is not only the lifeblood of African dictatorships but also the most important single factor that accounts for gross violations of human rights and violent suppression of democratic institutions on the continent. Just like any organized criminal enterprise, be they street-level or Mafia-style gangsters, African kleptocrats have used threats, fear, intimidation and violence to maintain and perpetuate their corrupt financial empires. In that context, A.G. Holder’s announcement was nothing short of breathtaking. It was as though he was addressing the national convention of the “Commissione” of all the Mafia families from New York City, Chicago, Detroit, Miami, Atlantic City, Las Vegas, St. Louis, Los Angeles and Philadelphia. In Kampala, he was talking directly to the African equivalents of the Godfathers of the Bonnano, Columbo, Gambino, Genovese, and Lucchese crime families in one place. It was almost surreal.
Though A.G. Holder told the African kleptocrats that he has a posse of special corruption prosecutors saddled up, he omitted telling them what tools he would be using to bring them to justice. They can rest assured that he will be coming after them armed with the Racketeer Influenced and Corrupt Organizations Act (commonly referred to as the RICO Act or RICO; 18 U.S.C. § 1961–1968). RICO was originally enacted to prosecute the Mafia and others actively engaged in organized criminal activity. Over the years its use has been expanded to cover corporate and other crimes; and now its application is likely to be expanded even further to go after the corrupt and thieving African dictators who launder hundreds of millions of dollars every year in the U.S. buying businesses and homes and making “investments” in legitimate commercial enterprises. Section 1962 of RICO provides in part:
(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity… to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. (b)… through a pattern of racketeering activity… to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce… (c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity… (d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.
Simply stated, African kleptocrats who rob their nations blind and bring their stolen loot to the U.S. to launder it will be tracked down and forced to disgorge and face jail time as well. What is potentially devastating to African kleptocrats is the fact that a RICO charge could be brought not only against them, but also their associates, business partners, investors, and any others in the U.S. or elsewhere who “directly or indirectly” facilitate their criminal enterprises. The penalties are severe: up to $25,000 and 20 years in prison per racketeering count. The racketeers must give up all of the gains from the criminal activity including the hundreds of millions tucked away in U.S. banks. RICO also allows private individuals damaged by the racketeer to file a civil suit and collect treble (three times) damages if they are successful. Proving a RICO charge in court is considered to be relatively easy as it focuses on “patterns” of behavior as opposed to criminal acts. Since conspiracy is one of the charges that could be brought in a RICO case, the kleptocrats’ underlings, accountants, business associates and partners and collaborators could be prosecuted.
Fixing Human Rights Violations by Prosecuting Kleptocrats
A.G. Holder says the Obama Administration is committed to battling corruption as “one of the great struggles of our time.” Holder’s words, if translated into concrete action could have a huge impact not only on governance in Africa but also in improving human rights protections. Corruption is fundamentally a human rights issue. As Peter Eigen, founder and chairman of Transparency International has argued, “[C]orruption leads to a violation of human rights in at least three respects: corruption perpetuates discrimination, corruption prevents the full realisation of economic, social, and cultural rights, and corruption leads to the infringement of numerous civil and political rights. Beyond that, corruption undermines the very essence of the rule of law and destroys citizens’ trust in political leaders, public officials and political institutions.”
The fascinating thing about the Obama Administration’s approach is its creative use of U.S. criminal statutes to deal with African dictators as organized criminal enterprises. Simply stated, the Administration has decided to deal with African dictators as Mafia bosses! If the U.S. could effectively investigate, vigorously prosecute and aggressively seize the assets of Africa’s kleptocrats, the continent may finally begin to see significant improvements in human rights and governance, a dramatic reduction in corruption and generate significant resources from recovered assets for investment in infrastructure and other social programs for the African population.
As I have previously documented, Transparency International [TI] (the global coalition against corruption) in its 2009 Corruption Perceptions Index (CPI) again bestowed upon Africa the dubious honor of being Kleptocracy Central, the continental home of the world’s most corrupt governments in the world. Leading the parade of kleptocracies are the regimes in Ethiopia, the Sudan, Zimbabwe, Equatorial Guinea, Kenya and the warlords of Somalia. These countries scored an atrocious 3.0 or less on the index. In certain countries, the corruption trend appears to be irreversible. For instance, in 2002, Ethiopia received a dismal score of 3.5 on the corruption index. In 2009, eight years after the ruling regime had established the “Federal Ethics and Anti-corruption Commission” (FEAC) with great fanfare and after periodic reports of “major accomplishments” in combating corruption, Ethiopia’s score dropped to an abysmal 2.7.
Publicly-owned assets are acquired in Ethiopia by regime-supporters or officials through illegal transactions and fraud. Banks loan millions of dollars to front enterprises owned by regime officials or their supporters without sufficient or proper collateral. Businessmen must pay huge bribes or kickbacks to participate in public contracting and procurement. Those involved in the import/export business complain of shakedowns by corrupt customs officials. The judiciary is thoroughly corrupted through political interference and manipulation as evidenced in the various high profile political prosecutions. Ethiopians on holiday visits driving about town complain of shakedowns by police thugs on the streets. Even the U.S. State Department spokesman Ian Kelley stated last year that the U.S. is investigating allegations that “$850 million in food and anti-poverty aid from the U.S. is being distributed on the basis of political favoritism by the current prime minister’s party.”
Over the past three years, high profile corruption cases in Ethiopia have been reported in the media. In one case, it was established that “USD$16 million dollars” worth of gold bars simply walked out of the bank in broad daylight. The official “anti-corruption” agency described the heist as a “huge scandal that took place in the Country’s National Bank and took many Ethiopians by surprise [in which] corruptors dared to steal lots of pure gold bars that belonged to the Ethiopian people replacing them with gilded irons… Some employees of the Bank, business people, managers and other government employees were allegedly involved in this disastrous and disgracing scandal.” In another case involving a telecommunications deal with the Chinese, a high level regime official was secretly tape recorded trying to extort kickbacks for himself and other regime officials. The same “anti-corruption” agency reported that “there was another big corruption case at the Ethiopian Telecommunications Corporation that took many Ethiopians by surprise” which involved the “competitive tendering for the supply of telecommunication equipment.” After an investigation, FEAC “found out that nearly 200 million USD has been lost to corruption through the entire fraudulent and corrupt process.” No high level official in good standing with the regime has ever been investigated or prosecuted for corruption.
The poor and powerless bear the brunt of corruption in Africa. The devastating impact of corruption on the continent’s poor becomes self-evident as political leaders and public officials siphon off resources from critical school, hospital, road and other public works and community projects to line their pockets. As for President Obama, it seems that he has finally found the silver bullet to deal with Africa’s corrupt thugs. In a pun, no more cash and KARI for Africa’s kleptocrats.
To be continued….
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