Tanzanian Association Oslo

BANK OF TANZANIA

SCANDAL:

World Bank, UN may join

hunt for stolen BoT funds

-BUT GOVERNMENT YET TO MAKE FORMAL REQUEST FOR ASSISTANCE IN RECOVERING BILLIONS OF SHILLINGS STASHED AWAY IN OFFSHORE BANK ACCOUNTS

LUCAS LIGANGA
Nusa Dua, Bali

AS the 133bn/- Bank of Tanzania embezzlement scandal continues to unfold, the government has yet to formally request assistance from a joint World Bank and United Nations initiative to help developing nations recover assets stolen by corrupt leaders.

Under the initiative dubbed Stolen Asset Recovery (StAR), poor nations such as Tanzania can seek assistance in retrieving assets spirited away to richer countries.

’’To the best of my knowledge, Tanzania has not yet submitted any request with regard to the asset recovery initiative,’’ the executive director of the United Nations Office on Drugs and Crime (UNODC), Antonio Maria Costa, told THISDAY here yesterday.

He was speaking at the sidelines of a UN anti-corruption conference being held in Indonesia to find ways of clawing back some of the billions of dollars in assets stolen by corrupt leaders.

The StAR initiative was jointly announced on September 17 last year, by the World Bank and the UN to help developing nations knock down barriers that make assets recovery so complex.

The importance of the assets recovery initiative to Tanzania is highlighted by the BoT corruption scandal where billions of shillings have been confirmed as stolen from government coffers under the EPA account.

Investigations by THISDAY have established that about half of the money embezzled from the BoT has already been stashed away in off-shore bank accounts, with Dubai emerging as a most favoured hiding place for the loot.

According to impeccable sources, around 60bn/- of the stolen money has been either hidden in foreign bank accounts or invested abroad, while the other 60bn/- or so has been sunk into various local investments including real estate, luxury vehicles and company shares.

And according to other reliable reports reaching us, one of the EPA beneficiaries even bought a multi-storeyed hotel building in Dubai, United Arab Emirates.

Insiders say the high-level investigation, led by Attorney General Johnson Mwanyika has already started tracing assets, and is now moving to freeze the bank accounts of all 22 companies identified in a special BoT audit report as having directly benefited from the EPA scam.

Government sources say it is still too early in the investigation for the government to request the assistance of the joint UN/WB initiative in recovering assets stolen from the central bank.

In announcing the initiative, UN Secretary General Ban Ki-moon, World Bank President Robert Zoellick, and UNODC Executive Director Costa said a real international effort is needed to ensure looted assets are returned to their rightful owners.

Costa told reporters at the Bali International Convention Centre that Indonesia was the first country to ask for assets recovery assistance, a move he said is likely to show the country’s political commitment in fighting corruption.

Transparency International estimates that the former Indonesian leader, the late Suharto, embezzled between $15bn and $35bn from his country while Ferdinand Marcos in the Philippines, Mobutu Sese Seko in the Democratic Republic of Congo, and Sani Abacha in Nigeria are alleged to have embezzled up to $5bn each.

The amount of money extorted and stolen each year from developing countries is over 10 times the approximately $100bn in foreign assistance being provided by all governments and civil organizations in the world.

’’But doors are open to countries willing to ask for StAR assistance because such initiative is one of the things that show us that a requesting country has a political commitment to fight the vice,’’ said the UNODC boss.

Addressing the opening session of the Conference of the states that are party to the United Nations Convention Against Corruption, Costa said the StAR initiative has progressed well into its preliminary phase, with assessment missions carried out in two countries and more requests made from other countries.

’’In asset recovery, time is of essence. Stolen assets rot quickly in idle bank accounts, rusty yachts, decaying real estate and devalued securities,’’ he said.

The UNODC chief, organizers of the five-day conference, added: ’’The sooner legitimate owners engage in asset recovery, the greater the chances of finding some of the wealth looted from central banks and national treasuries.’’

However, Costa expressed concern that the good intention of the StAR alignment could be disturbed by hidden gravitational forces.

’’We have detected some black holes that threaten to pull the StAR system out of its orbit. Middle level bureaucrats with connections, knowledge and entrenched interests are trying to block its implementation,’’ he observed.

He called for the need to neutralize these black holes in the countries’ administrations so that asset recovery could take place, inspired by politicians and put in place by technicians.

Meanwhile, the World Bank in collaboration with the UNODC and the International Police (Interpol) have invited delegates attending the conference to create StAR focal point contact in their countries to be used for responding to emergency requests for assistance.

In a letter circulated to the delegates yesterday, the three international institutions said the StAR initiative will develop capacity to respond to and file international mutual legal assistance requests, adopt and implement effective confiscation measures, enhance transparency and accountability of public financial management systems, create and strengthen national anti-corruption agencies and help monitor the recovered funds if requested by the countries.