Four days after the Tunisian people overthrew their dictator, Zine el-Abidine Ben Ali, the Swiss government ordered its banks to seize Ben Ali’s suspiciously acquired funds. A few days after that, the European Union froze Ben Ali’s assets in Europe.
This month, the same day that Egyptian President Hosni Mubarak was deposed, the Swiss government asked its banks to identify and block any assets belonging to Mubarak, who reportedly accumulated a multibillion-dollar fortune over his 30-year reign even though his presidential salary was about $800 a month. Swiss President Micheline Calmy-Rey said: “It cannot be that right at our door some people embezzle state funds and put them into their own pocket.”
Hooray for Switzerland!
But it makes one wonder: If Ben Ali and Mubarak indeed amassed their fortunes corruptly and hid them in foreign banks, why did Switzerland, the European Union and, for that matter, the United States wait until they were overthrown to do something about it? Shouldn’t governments committed to promoting democracy and transparency try to identify and freeze dictators’ dirty money while they are still in power, when it might change their behavior? Or are asset seizures merely a departure tax that fallen autocrats pay as they run out the door?
Mubarak and Ben Ali are not isolated cases. Rulers of other Middle Eastern countries where protests have broken out – Abdelaziz Bouteflika of Algeria and Ali Abdullah Saleh of Yemen, for example – have been accused of using their positions to enrich themselves and their families unjustly and unlawfully. Beyond the Middle East there is Ilham Aliyev, president of Azerbaijan, who, The Post reported last year, bought $44 million worth of Dubai real estate in the name of his 11-year-old son. There is Islam Karimov of Uzbekistan, whose daughter – WikiLeaked State Department cables reveal – has been dubbed the “most hated person in the country” for living lavishly on the proceeds of businesses she has seized. And Than Shwe of Burma, who has diverted billions of dollars in natural gas revenue to foreign accounts, aided by the U.S. government’s failure to enforce congressionally authorized sanctions against banks holding the Burmese government’s looted funds.
In authoritarian countries, corruption is not an incidental byproduct of political repression but a central organizing principle. The ability of authoritarian leaders to convert political power into wealth gives them a reason to cling to power and the means to do so. Their fortunes can purchase not just luxury but also security – the ability to buy off rivals and to maintain the loyalty of their troops, police and business elites. Disgust with ruling families buying yachts, villas and exotic animals with pilfered funds while their nations’ economies stagnate is also one of the main reasons ordinary people in these countries resent their rulers.
American and European diplomats tend to say that they lack leverage to press for human rights and democratic reform in dictatorships. But the massive corruption that helped sustain authoritarian rule in Tunisia and Egypt, and that continues to in many other countries, would not be possible without the cooperation of banks subject to the regulatory authority of, or dependent on business with, the United States and the European Union.
The problem is not that Western governments lack leverage; it is that they are reluctant to use it when diplomatic relationships might be jeopardized. It is an iron law of international relations that policies designed to promote democracy and accountability in authoritarian countries cannot be both consequential and agreeable at the same time. Going after Mubarak’s ill-gotten money while he was in power would have threatened something profoundly important to him and shaken a foundation of his dictatorship. Therefore, it would have made it hard for Western governments to carry on a friendly relationship with Mubarak. Therefore, it didn’t happen.
The solution is to establish a legal framework against high-level corruption that functions automatically, regardless of whether there is political will to embarrass a particular dictator. Banks and regulatory agencies should be required to question suspiciously large deposits by public officials and empowered to freeze corruptly acquired funds even if the government of the official’s country doesn’t request such an action. Switzerland now has stronger laws enabling banks to freeze such funds than does the United States. Congress should address this, as Sen. Carl Levin (D-Mich.) has proposed. Meanwhile, events in Egypt and Tunisia should give new impetus to an effort the Obama administration has initiated within the Group of 20, to encourage other nations to enforce similar rules.
It’s all very well to punish the pariahs of the world once they’re down – their people deserve to have their money back. But it would be more honorable, and useful, to hold them accountable while their fortunes are up.
By Tom Malinowski, Washington director for Human Rights Watch.