Godfathers of Corruption (Part I) Sons of the kleptocratic regimes

Read any article on corruption prevention, and the first thing you’ll be told is that ‘political will’, or the tone at the top, is the foundation of any successful anti-corruption effort.  But what if a country’s leader, whose ethics and integrity should be beyond question, isn’t as principled as they should be?  True to the old adage that ‘absolute power corrupts absolutely’, we have compiled a list of the ten most corrupt world leaders of recent history.

Proof that corruption is truly a global issue, the list de-bunks the myth that cases of grand corruption (and kleptocratic regimes responsible for it), are limited to certain parts of the world.  Of the ten world leaders who made the list: three are from Africa, three from the America’s, two from Asia, and two are from Europe.

Most corrupt world leaders of recent history

In reverse order, the tend most corrupt world leaders of recent history (measured in absolute terms) are:

  1. Arnoldo Aleman, President of Nicaragua (1997 – 2002)

Amount Embezzled: $100 million | Years in Office: 5

Soon after leaving office in 2002, the 81st President of Nicaragua, Arnoldo “El Gordo” Aleman, was arrested on corruption charges involving $100 million of state owned funds.  He was convicted of money laundering, fraud, embezzlement and electoral crimes the following year, and sentenced to 20 years imprisonment.  The corruption uncovered within his administration was so rife that it led to the arrest of a further 14 people, including a number of close family members.

Renowned for his use of a bottomless government credit card for personal expenditure, the amounts charged included $25,955 for a honeymoon in Italy, $68,506 for hotel expenses and handicrafts while on vacation in India (with his wife), and $13,755 for a night at the Ritz Carlton hotel in Bali.

According to the World Bank  and UNODCs Stolen Asset Recovery Initiative (StAR), a 2008 publication by the US Immigration and Customs Enforcement Agency, stated that a Nicaraguan investigation found that (between 1999 and 2002), Aleman and his cronies allegedly embezzled an estimated $100 million of government funds.

The money was laundered through shell companies and fraudulent investment accounts in Panama and the United States, then used to purchase high-value assets including real estate and certificates of deposit. The accounts were also used to dispense embezzled funds to Aleman’s family members.

In January 2009, the Nicaraguan Supreme Court controversially overturned Aleman’s corruption conviction and set him free.  While never made public, it is thought that his release was part of a secret power-sharing arrangement made with Nicaragua’s current president Daniel Ortega.

Return of assets: While there are on-going asset recovery cases in the Philippine’s, Singapore and the United States, the only completed case has been the forfeiture and repatriation of approximately $2.7 million of Aleman’s assets to the Nicaraguan government (by the United States) in 2004.

  1. Pavlo Lazarenko, Prime Minister of Ukraine (1996 – 1997)

Amount Embezzled: $114 million to $200 million | Years in Office: 1

An official count by the United Nation’s found that Pavlo Ivanovych Lazarenko, the 5th Prime Minister of the Ukraine, had allegedly siphoned off $200 million from state coffers (half a million dollars for each day as Prime Minister).  The funds were funnelled through various bank accounts in Poland, Switzerland and Antigua, then laundered through a shell company in the United States, and used to purchase various properties.

In December 2008, Lazarenko was detained by Swiss authorities on money-laundering charges as he crossed the border from France, but was released a few weeks later after posting a $3 million surety.  A few months later the Ukraine stripped him of his immunity, and he fled to the United States.

Detained on suspicion of improperly entering the country, he was subsequently indicted on 53 counts of conspiracy, money laundering, wire fraud, and interstate transportation of stolen property. In November 2009, he was sentenced by a California court to 97 months’ imprisonment, and ordered to pay over $9 million in fines and forfeit $22.8 million in various other assets.  Lazarenko was released from a United States federal prison in November 2012.

Return of assets: While Swiss authorities returned an unspecified amount to the Ukraine in 2001, there are still ongoing asset recovery cases in Liechtenstein (amount unspecified), Antigua and Barbuda ($87.1 million), the United States ($271 million), Guernsey ($150 million), Lithuania ($29 million) and Switzerland ($5.4 million).

  1. Alberto Fujimori, President of Peru (1990 – 2000)

Amount Embezzled: $600 million  | Years in Office: 10

The son of a Japanese immigrant, Alberto Fujimori was Peru’s 45th President.  An authoritarian ‘strongman’, he was credited with crushing a number of nationwide terrorist insurgencies, while at the same time rescuing the country from economic collapse.  Notwithstanding these achievements, according to the historian Alfonso Quiroz, between $1.5 billion and $4 billion was lost to corruption, making the  Fujimori’s regime the most corrupt in Peruvian history.  During his decade in power, Fujimori is alleged to have illegally accumulated over $600 million in public funds.

In April 2001, four months into his third term, Fujimori fled to Japan after a $1 billion corruption scandal broke involving the country’s national intelligence chief (who was caught on video bribing an opposition senator to join Fujimori).  On arrival, Fujimori attempted to resign his presidency via fax, a move rejected by the country’s Congress, whose preference was to remove him by impeachment.

Four-and-a-half years after going into exile, Fujimori announced his intent to launch a new bid for the presidency.  In November 2005, he flew to Chile (from Japan) was arrested, and extradited back to Peru to face trial. 

After admitting to diverting $15 million of public funds to his intelligence chief, Vladimiro Montesinos, he was found guilty of embezzlement, and in July 2009, sentenced to seven and a half years in prison. Two months later he pled guilty to another bribery charge, and was given an additional six-year term.  In 2015, Fujimori pled guilty to further bribery and graft charges (his fifth such conviction) and issued with an additional eight-year sentence.

Fujimori’s trials are historic in that they mark the first (and only) time that a democratically elected head of state has been extradited to his own country, put on trial, and found guilty.

Ironically, despite still being in jail, his daughter (Keiko Fujimori) was narrowly defeated in Peru’s recent Presidential elections, losing by just 43,597 votes!

Return of assets: While there have been no asset recovery cases specifically involving Fujimori, a combined $172.5 million worth of funds – related to Vladmiro Montesinos (see above) – has been returned by: Switzerland ($93 million), the Cayman Islands ($44 million) and the United States ($35.5 million).  Cases are still pending in Luxembourg, Panama, Mexico and the United States.

  1. Jean-Claude Duvalier, President of Haiti (1971 – 1986)

Amount Embezzled: $300 million to $800 million  | Years in Office: 15

Jean-Claude “Baby Doc” Duvalier inherited Haiti’s presidency (aged 19) on the death of his father François “Papa Doc” Duvalier, in April 1971.  While implementing a number of reforms demanded by Haiti’s key ally, the United States, he maintained his father’s terror apparatus – including the infamous Tontons Macoutes (or ‘bogeyman’) – and added a raft of new techniques for skimming hundreds of millions of dollars from the country’s already poor coffers.

The year Baby Doc took over, The US Commerce Department reported that 64% of the government’s revenue had been misappropriated, with millions diverted for “extra-budgetary” expenses, including deposits made into Baby Doc’s Swiss bank accounts.  During his 15-year reign, Duvalier and his cronies allegedly amassed between $300 million and $800 million.  In 1980, the IMF provided Haiti with $22 million in aid.  Twenty million of this was allegedly siphoned off, with $16 million going to the Duvalier family and the balance to the Tonton Macoutes. 

Two years later, when Mexico supplied the country with $11 million of oil, the regime’s middlemen attempted to bypass international sanctions and sell it to Apartheid South Africa.  In another moneymaking scheme, blood was bought from Haitian donors for $5 a pint and sold to Americans for $35 a pint.  Duvalier also made millions from involvement in the narcotics trade, as well as in selling body parts. The result? A flourishing cadaver market in which at one point, a ‘supply shortage’ lead to the regime raiding funeral parlours for bodies.

In 1985, after a referendum supported by 99.9% of the population, Duvalier was made President for life.  Despite this, he was ousted by a popular uprising the following year and fled to France, where he lived in self-imposed exile for the next 25 years.  He unexpectedly returned to Haiti in 2011, and was promptly arrested and charged with corruption and embezzlement.  Pleading not guilty, the case was never heard, as Duvalier died of a heart attack (at his villa in an affluent suburb in the hills overlooking Port-au-Prince) in October 2014, aged 63.

Return of assets: Apart from a case being appealed in Switzerland (of $6.5 million), the only other asset recovery related case recorded, is the long running proceedings involving Duvalier assets held in the name of the Foundation Brouilly.  Based in Liechtenstein, the Brouilly Foundation is owned by a Panama based company, which in turn is owned by members of the Duvalier family.

  1. Slobodan Milosevic, President of Serbia/Yugoslavia (1989 – 2000)

Amount Embezzled: $1 billion  | Years in Office: 11

Slobodan Milosevic spent two-terms as Serbia’s President (between 1990 to 1997) before becoming President of the Federal Republic of Yugoslavia.  He is however, best known for his role in the Yugoslav wars, where he presided over the mayhem and mass murder that took place in Kosovo, Croatia and Bosnia in the nineteen-nineties.  The International Criminal Tribunal for the former Yugoslavia (ICTY) subsequently indicted him for war crimes and crimes against humanity; the first international war crimes tribunal held since the 1945 International Military Tribunals (held in Nuremberg and Tokyo).

Following the disputed 2000 presidential elections, Milosevic resigned his presidency.  He was subsequently arrested by authorities and charged with corruption, the abuse of power and embezzlement.  When the investigation faltered over a lack of evidence, he was extradited to The Hague to face the ICTY charges.  Defending himself, Milosevic refused to recognise the court’s legitimacy, as it had not been mandated by the UN General Assembly.

According to the Washington Post, initial evidence uncovered by a joint investigation by Yugoslavia, the U.S. Treasury Department and the UN’s chief war crimes prosecutor, suggested that Milosevic, his family and a network of up to 200 loyal “businessmen-politicians”, had embezzled several billion dollars of public funds for personal use.  While Yugoslavia’s central bank speculated that as much as $4 billion had been taken, the amount includes funds thought to have been used to keep Serbia functioning through a decade of UN economic sanctions. 

Notwithstanding this, insiders (including Milosevic’s close relatives) are believed to have laundered hundreds of millions of dollars through dozens of Cypriot front companies, with the trail pointing to Switzerland, Greece, France, Germany, Italy, Lebanon, Israel, Russia, China, Britain, Liechtenstein and South Africa.

In perhaps the biggest single case investigated, Yugoslav officials attempted to track the proceeds from the sale of the state-owned cell phone company PTT Serbia to a consortium of Italian and Greek phone companies.  Sold for around $1 billion, $200 million was never deposited into state accounts, and an additional $350 million allegedly went to companies controlled by Milosevic’s friends.

Milosevic died of a heart attack in March 2006, before the trial could be concluded.

Return of assets: Despite the amount allegedly stolen, there are no asset recovery cases on record.

  1. Zine Al-Abidine Ben Ali, President of Tunisia (1987 to 2011)

Amount Embezzled: $1.0 billion to $2.6 billion | Years in Office: 23

The second President of Tunisia, Zine Al-Abidine Ben Ali came to power in November 1987, after ousting President Habib Bourguiba in a bloodless coup.  Once there, he remained in power for the next 23 years, each time being ‘re-elected’ by margins exceeding 90%.

Under Ben Ali’s administration, Tunisia’s GDP grew by an average of nearly 5% (year-on-year) for 20 years, with Per capita GDP tripling from $1,201 in 1986 to $3,786 in 2008.  So stunning was its growth, that in 2009, a Boston Consulting Group report listed the country as one of Africa’s “Lions”.

While Ben Ali’s reforms halved the country’s poverty rate (from 7.4% in 1990 to an estimated 3.8% in 2005) high unemployment – particularly among the youth – a disenfranchised rural and urban poor, and continued repression, led to increasing unrest.  The situation came to a head on 18 December 2010, when Mohamed Bouazizi (a 26-year-old fruit-seller) set himself alight after being humiliated by local policemen.  Sparking off  what soon became the Arab Spring, a wave of demonstrations and protests exploded across the country, and within a month Ben Ali and his wife fled the country.  Denied refuge in France, Ben Ali was offered asylum in Saudi Arabia, and currently lives in Jeddah (the same city where Uganda’s infamous Idi Amin, lived in exile until his death in 2003).

According to a 2015 World Bank research report, Ben Ali’s family and members of his inner circle are alleged to have defrauded the state of between $1 billion and U$2.6 billion over a seven-year period.  At one stage it is thought that privileged insiders were capturing 21% of all Tunisia’s private sector profits,  mostly through the illegal appropriation of national assets and skimming wealth from most sectors of the country’s economy.

Following Ben Ali’s departure, an investigation into his wealth resulted in the new government confiscating the assets of 114 members of the Ben Ali Clan (including Ben Ali himself).  Items seized included 550 properties, 48 boats, 40 share portfolios, 367 bank accounts and over 400 enterprises. The total combined value of these assets was approximately $13 billion, more than one-quarter of Tunisia’s 2011 GDP.

In June 2011 Ben Ali and his wife (Leila Trabelsi) were convicted by a Tunisian court, in absentia, for theft and unlawful possession of cash and jewellery and sentenced to 35 years in prison (NB when Leila fled Tunisia, she is reported to have taken with her over one-and-a-half tons of gold valued at $50 million).  While an international arrest warrant has been issued for Ben Ali’s arrest, Saudi Arabia has consistently refused Tunisia’s request to extradite him.

In a dramatic about face, the Tunisian government sparked controversy when they tabled the draft National Reconciliation Act (in June 2015), paving the way for a potential amnesty.  This followed a decision by Tunisian courts to annul the 2011 decree that had confiscated Ben Ali and his families assets, ordering that the be returned.

Return of assets: To date funds totalling $68.8 million have been returned: $28.8 million from Lebanon  (being the proceeds from a bank account held in the name of Ben Ali’s wife), and $40 million from Switzerland.  Apart from this, are asset recovery cases pending in Switzerland ($28.5 million) and Canada ($2.6 million).

  1. Sani Abacha, President of Nigeria (1993 – 1998)

Amount Embezzled: $2 billion to $5 billion | Years in Office: 5

The first Nigerian Soldier to make full General without missing a single rank, Sani Abacha led the country’s ninth military coup since its independence, when he overthrew the transitional government of Chief Ernest Shonekanon in August 1993.  The country’s seventh military head of state, Abacha was a serial coup d’état instigator, having previously played key roles in the 1966 counter-coup, and the 1983 and 1985 coups.

Although promising a return to democracy, Abacha’s actions where anything but democratic.  A year after taking power, he issued a decree that placed his government above the jurisdiction of the courts, a move that gave him absolute power.  Backed by the Special Body Guard Unit (an armed force of between 2,000 to 3,000 men based at the presidential villa), Abacha purged the military, banned political activity and took control of the press.