The Godfathers of Corruption Part II

Despite appalling human rights abuses (which at one stage lead to the Commonwealth Heads of Government Meeting approving the unprecedented step of suspending Nigeria from the Commonwealth) – from an economic perspective – Abacha’s five-year rule was a miracle.  External debt was reduced from $36 billion to $27 billion, foreign-exchange reserves increased from $494 million to $9.6 billion, and inflation was slashed from 54% to 8.5%.

While still shrouded in mystery, Abacha’s rule was cut short when he died of a suspected heart attack on 8 June 1998.  During his five years in power, he and his family allegedly embezzled between $3 billion and $5 billion.  According to the World Bank, part of this wealth was obtained through bribes paid by foreign companies doing business in Nigeria, and part stolen directly from the country’s Central Bank.  The funds were laundered through a network of front companies in several jurisdictions, before being deposited into bank accounts (controlled by Abacha and his family) in Switzerland, Luxemburg, Liechtenstein, Jersey and the Bahamas.

In February 2014, sixteen years after his death, Abacha was (posthumously) awarded a Centenary Award as part of Nigeria’s 50th Independence Celebrations.  According to the government, the award was in recognition of his “immense contribution to the nation’s development”.

Return of assets: The return of the Abacha fortune remains one of the most colourful of all the leaders on the list.  In return for dropping criminal prosecution (in 2002), the Abacha family agreed to return $1.2 billion taken from the Central Bank.  Jersey returned a further $160 million the same year.   This was followed by Switzerland, who in June 2006 (after numerous failed appeals by the Abacha family) agreed to repatriate $505 million.  Ironically, according to Swiss and Nigerian advocacy groups, around half of this amount may have since been ‘re-stolen’ by corrupt officials!

After a hiatus of five years Jersey returned a further $36 million and Liechtenstein $225 million (after the longest running financial court case in the principality’s history).  In August 2014, a further $480 million worth of Abacha related bank deposits were frozen by the United States Department of Justice, the largest forfeiture in the agency’s history.  Switzerland returned a further $380 million a year later.

While over $2.5 billion has been returned to date, asset recovery cases are still pending in the Bahamas, Ireland, United Kingdom and the United States.

  1. Mobutu Sese Seko, President of Zaire now Democratic Republic of the Congo (DRC) (1965 – 1997)

Amount Embezzled: $4 to $5 billion  | Years in Office: 32

The product of a missionary school education, Mobutu Sese Seko Koko Ngbendu wa za Banga (meaning “the all-powerful warrior who, because of endurance and an inflexible will to win, will go from conquest to conquest leaving fire in his wake”), was a serial coup plotter.  During the 1960 Congo Crises, he led the coup that ousted Patrice Lumumba, the country’s first democratically elected leader.  In return, he was appointed commander-in-chief of the armed forces.  Less than five years later he led a second coup, installing himself as President.  Declaring a regime d’exception, he assumed sweeping powers, and went on to rule the country for almost a third of a century.

The original  ‘Big Man’ of Africa, Mobutu consolidated and kept power by creating a vast patronage network.  Built on the exploitation of the country’s immense mineral wealth, Mobutu used it to effectively nullify any opposition.  Endemic governmental corruption, mismanagement and neglect over a number of years, led to hyperinflation (4,000% p.a. by 1991), a large external debt, and massive currency devaluations.  Civil unrest soon followed.

Amidst all of this, Mobutu managed to amass one of the largest personal fortunes in the world.  While the actual amount will never be known, he is alleged to have embezzled between $4 billion to $5 billion (an amount almost equivalent to the country’s foreign debt at the time it was forced to default on its international loans in 1989).  His excesses where legendary, and included having the world’s leading pastry chef, Gaston Lenôtre, flown in from Paris by Concorde to personally deliver his birthday cake.  While not publically condoned, corruption was so systemic under Mobutu, that at one stage he advised party delegates that “if you steal, do not steal too much at a time.  You may be arrested … Yibana mayele – Steal cleverly, little by little”!

Holding onto power for 32 years, Mobutu proved himself adept at maintaining rule in the face of internal rebellions, external invasions, and attempted coups. He finally relinquished power in May 1996, following an uprising led by Laurent Kabila (a Zairian Tutsi).  In the space of just three weeks, the uprising turned into to a full-scale political rebellion.  Mobutu, already terminally ill, fled to Togo and then to Morocco, where he died from prostate cancer the following year.

Aside from the title as Africa’s most corrupt ruler, Mobutu is best known for his role in hosting the heavy weight world championship title fight between Muhammad Ali and George Foreman, in Kinshasa in October 1974.  Known as the ‘Rumble in the Jungle’, each fighter was paid $5 million for their appearance.

Return of assets:  While there has been talk of a complex network of Cayman Island shell companies, apart from a few Swiss bank accounts, little is known of the whereabouts of Mobutu’s wealth.  In 2009, Switzerland unfroze $6.68 million worth of Mobutu’s assets, ending a failed 12-year attempt to repatriate funds back to the Democratic Republic of the Congo (DRC).  At the centre of this decision was a lack of “cooperation” from the DRC government, who’s Deputy Prime Minster was one of Mobutu’s son.  This lack of cooperation resulted in the funds being handed back to the Mobutu family.

  1. Ferdinand Marcos, President of the Philippines (1965 – 1986)

Amount Embezzled: $5 billion to $10 billion | Years in Office: 21

Claiming to be the country’s ‘most decorated war hero’ (a title now discredited, with only 3 of the 27 medals he claimed to have been awarded during the Second World War shown to be true), Ferdinand Marcos was elected the 10th President of the Philippine’s in 1965.  In September 1972, mid-way through his second term, fears of a communist takeover resulted in Marcos dissolving Congress and declaring martial law.  It stayed in place for the next decade.  He was finally ousted by the People Power Revolution in February 1986, and fled to the United States, where he lived in exile until his death in Hawaii three-and-a-half years later.

During his 21 years in power, the Philippines became one of the most heavily indebted countries in Asia.  External debts increased from $360 million (in 1962) to $28 billion (by 1986). Wages fell by roughly one third, and the number of people living below the poverty line almost doubled (from 18 million to 35 million).

Over the same period, Marcos is alleged to have embezzled between $5 billion and $10 billion.  According to the World Bank, the bulk of this wealth was accumulated through six key channels: takeover of large private enterprises; creation of state-owned monopolies in key sectors of the economy; awarding of government loans to private individuals acting as fronts for Marcos or his associates; directly raiding the country’s treasury and other government financial institutions; kickbacks and commissions from firms working in the Philippines; and skimming off foreign aid and other forms of international assistance. The proceeds were laundered through shell corporations, then invested in real estate within the United States; or deposited into various domestic and offshore banking institutions, using a mixture of pseudonyms, numbered accounts and code names.

Known for their lavish living, an inventory of assets left at the Malacanang Palace in Manila (taken soon after their exile) included over a thousand pairs of shoes belonging to the First Lady, 888 handbags, 71 pairs of sunglasses and 65 parasols.  On their arrival in the United States, jewellery, now valued at over $21 million, was seized by the US Bureau of Customs and returned to the Philippines.  Currently being used as a “virtual exhibit” in an online anti-corruption campaign, the current government has recently announced plans to auction if off.

While Imelda Marcos was found guilty on corruption charges in the mid-1990s and sentenced to a minimum of 12 years in prison, the conviction was overturned on appeal.  She is currently a member of the House of Representatives, while her son, Ferdinand Jr., is a Senator (having recently failed in his bid to become the country’s Vice President in the May 9 presidential polls).  Her daughter, Imee, is the governor of their home province, Ilocos Norte.

Return of assets:  Since its inception in 1986, The Presidential Commission on Good Government (PCGG), a quasi-judicial agency established to recover the ill-gotten wealth accumulated during the Marcos regime, has managed to recover nearly $3.6 billion in assets.  Included in this is $688 million returned by Switzerland in 2004.  The total costs incurred in achieving this have been  around $61 million.  If civil asset recovery cases still pending in Switzerland, the Philippines, Singapore and the United States are successful, recovery efforts could reach $4.2 billion by the time the PCGG winds-up.

  1. Mohamed Suharto, President of Indonesia (1967 – 1998)

Amount Embezzled: $15 billion to $35 billion | Years in Office: 31

Taking top spot in our list of most corrupt world leaders of recent history is President Mohamed Suharto of Indonesia. The country’s second president, Suharto gained control of the government in 1967 (soon after a failed left-wing coup) and went on to rule for the next 31 years.

Suharto’s ‘New Order’ policy (implemented soon after taking power) was built on a strong, centralised military-dominated government, which became critical to maintaining stability over a diverse, sprawling country of over 13,000 islands.  A strong anti-Communist stance won him economic and diplomatic support from the West; while rapid and sustained economic growth, and dramatically improving health, education and living standards, guaranteed him popular support at home.

Between 1965 and 1996, Indonesia’s GNP averaged a remarkable 6.7% per annum, with GDP increasing from $806 to $4,114 per capita.  By 1997, Indonesia’s poverty rate had fallen to 11% (from 45% in 1970), life expectancy was 67 years (up from 47 years in 1966), infant mortality had been cut by more than 60%, and the country had reached rice self-sufficiency (an achievement which earned Suharto a gold medal from the FAO).

By the mid-1990s however, growing authoritarianism and widespread corruption had sown the seeds of discontent. The same economic growth that had ensured Suharto’s popularity in the 1970s and 1980s, had resulted in a rapid expansion of what Indonesians had dubbed KKN: Korupsi (corruption), Kolusi (collusion) and Nepotisme (nepotism).

Using a system of patronage to ensure loyalty, Suharto managed to amass a fortune of between $15 billion and $35 billion.  The control of state-run monopolies, access to exclusive supply contracts and special tax breaks were given to companies owned by his four children, family members and close friends.  Many organisations included a Suharto crony in various business activities, as it became the only way of reducing the ‘uncertainties’ caused by bureaucratic red tape.  In return, kickbacks and tribute payments (usually cloaked as charitable donations) were made to dozens of foundations (‘yayasams’) overseen by Suharto.  While created to ‘assist’ with the construction of rural schools and hospitals, they effectively functioned as the President’s personal piggy bank. Donating millions to yayasams became part of the cost of doing business in Indonesia, with financial institutions required to contribute 2.5% of their annual profits each year.  According to Robert Elson, Suharto’s biographer:

“corruption [was] a well-managed franchise, like McDonald’s or Subway … Everybody knew how much you had to pay and to whom.  Suharto didn’t invent the depth and breadth of corruption. What he did was to manage it on a scale that no one had ever been able to do before.”

In 1998 the tide turned when the Asian Financial Crises took Indonesia to the brink of economic collapse.  Rising discontent led to riots and demonstrations forcing Suharto to resign.  Two years later he was charged with misusing $550 million from seven charities he controlled while president, and temporarily placed under house arrest.  Pronounced to ill to stand trial, another attempt (two years later) ended the same way.  Finally, in July 2007, a $1.5 billion civil lawsuit was filed against Suharto.  The case was never heard, as he died a few months later.

Return of assets:  In 2010, the Indonesian government successfully brought a private civil action against the Suharto family for the recovery of $307.4 million.  Apart from this (and the cases mentioned above), the only other case recorded, relates to $50.4 million worth of assets controlled by Suharto’s son, “Tommy”, which was frozen by Guernsey in 2002.  Tommy subsequently served five years of a 15-year prison sentence for ordering the murder of the Indonesian Supreme Court judge who convicted him of corruption in connection to a (unrelated) multimillion-dollar real estate scam case.

Other contenders for the most corrupt world leader

While the ten leaders listed above stood out, they were not the only ones vying  for the title of the world’s most corrupt leader.  Other strong contenders included Ukraine’s Viktor Yanukovych, who is alleged to have kept a log book showing that he had paid $2 billion in bribes while in office (or $1.4 million for each day he was president).  Then there is Teodoro Obiang Nguema Mbasogo, President of Equatorial Guinea.  With a personal fortune thought to be around $600 million, in 2003, Obiang took personal control of the country’s treasury, arguing that this personal ‘intervention’ was the only way to prevent civil servants from being ‘tempted’ to engage in corrupt practices. The following year he transferred $700 million into various US bank accounts controlled by himself and his family.

Another potential candidate worth mentioning (as no list would be complete without him) is Italy’s enigmatic Silvio Berlusconi.  With a personal net worth thought to be around $9 billion, Berlusconi estimated (in 2009) that his 2,500+ court appearances, in 106 corruption related trials spanning two decades, had cost him more than $200 million in legal fees!  Notwithstanding this, Italians still elected him president!

Finally, in an effort to ensure gender equality, it is worth mentioning that a lone female also made the list of contenders.  While President Marcos of the Philippines managed to make it to number two on the list of most corrupt world leaders of recent history, a 2007 poll carried out by Pulse Asia, indicated that 42% of his countrymen (and women) felt that Philippine’s most corrupt leader of all time wasn’t Ferdinand Marcus … but Gloria Macapagal Arroyo!

Is there a world leader that you feel should have made the list but didn’t? If so, share it with us in the comments section below, as I’d love to hear from you.

About the author: Jeremy Sandbrook is the Chief Executive of Integritas360, a global social enterprise that helps charities and NGOs/NFPs  ‘corruption-proof’ themselves. An internationally recognised anti-corruption expert, he has spent the last decade working in the international development sector, predominantly in Africa, Europe and Australasia. Jeremy also lectures on the topic at the University of Sydney’s Centre for Continuing Education. 

Key sources: While the above rankings were based on information sourced from various articles, heavy reliance was placed on the Stolen Asset Recovery (StAR) Initiative (established by the World Bank Group and the United Nations Office on Drugs and Crime (UNODC) in 2007) and Transparency International.