* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
By Tom Cardamone
It would be a bit harsh to say that international efforts to recover stolen government assets have been unblemished by success. But it wouldn’t be too far off the mark.
There have been some high profile cases, such as that of Philippine dictator Ferdinand Marcos, in which money from government coffers was found and returned.
In the Marcos case $620 million of the estimated $7.5 billion that he funneled out of the country during his reign was located and repatriated. For the mathematically inclined that amounts to about 8 percent of what was embezzled. Unfortunately, that effort took 18 years.
As it turns out the Marcos case was a watershed event in the annals of asset recovery. According to a new report by the World Bank and the UN Office on Drugs and Crime (UNODC) only about $5 billion in stolen government funds have been recovered over the past 15 years.
In ‘Barriers to Asset Recovery’ the WB/UNODC report estimates that $30 billion is misappropriated around the world each year.
This means, shockingly, that only about percent of all stolen government money is ever seen again. The rest is absorbed into the shadow economy, laundered until it is crisp and green, and then used to buy the cars and yachts and mansions that corrupt government officials (deposed and otherwise) seem to love so very much.
While the World Bank/UNODC report suggests eight ways to strengthen recovery efforts, such as improved cooperation among governments and better anti-money laundering statutes, these steps will likely not be nearly enough to improve recovery to any great extent. I will be the first to say that recovery efforts should continue.
It is one of many tools in the chest that are needed to address the issue of illicit flows of money out of poor nations. And the intentions behind the effort are noble in that they are an attempt to make things right for the poorest of the poor among us.
However, “recover stolen assets” would not be at the top of my weekly to-do list. The reason is that the opportunity costs of trying to locate, let alone recover, corrupt proceeds are just too frustratingly, maddeningly, horribly high. Given their complexity and difficulty, efforts to recoup stolen funds are Sisyphean in the extreme.
Rather than ‘recovery’ the watchword should be ‘prevention.’ Better to never start smoking than trying to stop.
And corruption is nothing more than a cancer on societies the world over. I hope for a day when corrupt money is but a trickle rather than a flood. And that is the goal so many financial transparency groups around the world seek to achieve.
They are working with multilateral institutions such as the OECD, the Financial Action Task Force and the G20 countries to propose solutions (such as requiring that the owners of bank accounts, companies and trusts be known to government authorities) to create a global financial system that is transparent and fair.
Those organisations seek to create a system where it is exceedingly difficult to hide or launder money whether the source is corrupt government officials, rich dentists or drug cartels.
Why not expend time and effort to curtail the flow of corrupt funds rather than try to recover them? All it takes is political will.
Tom Cardamone is managing director of Global Financial Integrity.
