Dynamics - December 2012
Recovering assets from fallen dictators
Recovering assets from fallen dictators is easier said than done, says Maryam Kennedy, our Partner in the Government Sector – Fraud Investigation & Dispute Services.
The Arab Spring has created renewed optimism that the new administrations can recover billions of pounds of the wealth of their nations siphoned off by fallen dictators. Tracing these assets will be a long and complex journey across numerous countries, bank accounts and networks.
Under the reign of the previous dictators, government’s financial systems and reporting were often designed to conceal and obscure the country’s finances.
Twenty-five years after the fall of the Marcos regime, efforts to track down the public funds taken by the family and their cronies continue.
In Nigeria, the government continues to pursue the Abachas. In Indonesia, only a small fraction of the estimated US$35b hidden by Suhartos during their 32-year rule has been recovered so far. The new governments in Tunisia, Libya and Egypt face greater challenges.
Different classes of assets in different jurisdictions require different approaches:
- Conventional litigation-based approaches
- Negotiations with foreign governments
- Cooperation with domestic law enforcement agencies and with international bodies
Under the reign of the previous dictators, government’s financial systems and reporting were often designed to conceal the country’s finances. This history of misleading data, and destruction of government records in the course of revolutions, means there is minimal information available to “build the trail.”
Addressing this challenge requires a forensic approach. For example, cross-analysis of cash flows at a macroeconomic level — such as revenues from the oil sector — and corresponding outflows, can be the starting point in identifying funds that are eventually siphoned off.
Using forensic tools to analyze vast quantities of data can help investigators make connections and understand relationships between individuals, entities and transactions and across borders.
The new administrations will need sustained political will and significant effort and resources. Building broader teams to support these efforts, including specialists in forensic accounting, technology and business intelligence, will be critical.