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Economy 4.0

Stopping dictators retiring with their profits

David Brancaccio Feb 10, 2011
Economy 4.0

Stopping dictators retiring with their profits

David Brancaccio Feb 10, 2011

CORRECTION: The original version of this article incorrectly referred to Transparency International’s subsidiary in Tunisia requesting a probe into the Mubarak family wealth. It was actually the subsidiary in France requesting this probe; the group does not currently have a subsidiary in Tunisia. The text has been corrected.


Kai Ryssdal: Hosni Mubarak and his family have piled up quite a fortune in the 30 years he’s been running Egypt. By some estimates, in the billions of dollars — certainly in the millions, many millions. There are differences of opinion as to whether that’s because of a shrewd business sense or a sense of straight out corruption.

But when strongmen and dictators depart the scene with nest eggs intact, attention turns to global anti-corruption rules and what they’re really worth. The idea of how to make the global economy work better for more people, not just the rich ones with ill-gotten gains is the idea behind our series Economy 4.0.

Here’s our special correspondent David Brancaccio.

David Brancaccio: Say you work for the CIA. Your supervisors are supposed to monitor your finances. If a pile of cash were to pour into your bank account one day, you’d have some explaining to do, so the boss knows you’re not up to something contrary to the national interest. What about world leaders, especially top politicians in countries with long traditions of public corruption?

Turns out, the world does have such a system, according to Swiss law professor Mark Pieth.

Mark Pieth: It’s not forbidden for a politician to have a bank account, obviously, but politicians need to be watched more carefully than other people.

Professor Pieth is chairman of the anti-corruption team at the Organization for Economic Cooperation and Development and one of those who tried, at least, to keep ill-gotten gains out of the hands of the family of Mobutu Sese Seko, the former dictator in the Congo. He says a multi-national outfit called the Financial Action Task Force requires banks to monitor finances of these big-time politicians for unexplained surges.

Pieth: This should set off red flags.

But not always. A World Bank report in 2009 called the rules for monitoring political bigwigs a quote “overall failure” and urged more vigorous documenting of financial transactions by all politicians, both foreign and domestic. And even if a Swiss, British or U.S. bank spotted a strangely overflowing bank account, the foreign country in question has to be willing to act.

In 2003, the United Nations adopted the Convention Against Corruption, now signed by about 140 countries, including Egypt. In Cairo, Omnia Nabil Hussien is with the anti-corruption group Transparency International.

Omnia Nabil Hussien: Corruption is widespread and it’s in all of the sectors and efforts up to now are not sufficient.

As for the Mubarak family wealth, Hussien says Transparency International does not focus on individual cases, although its subsidiary in France was among groups calling for a probe into the wealth of the ousted head of state there. Still, the question arises, why wait until a government falls, Tunisia-style, before taking action?

Scott Horton: For political reasons, law enforcement bodies in foreign states won’t do it because it would unsettle diplomatic relations.

Columbia University law professor Scott Horton has worked on several efforts to seize the assets of former heads of state. He says the successor government after a change of power has both the legal authority and the police to take action.

Horton: So, you know, the dictator is deposed, the new people who come in definitely have a very strong legal hand to go after him and go after his assets.

Even some critics of the Egyptian president and his wealth point out that it’s not clear Hosni Muburak’s business dealings broke the law. Egyptian law typically requires foreign ventures to give a local a piece of the action. That local could legally be a member of the Mubarak family. But these are some of the rules that may need to change if financial integrity and political stability are to come to the region.

In New York, I’m David Brancaccio for Marketplace.

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