The UN Convention Against Corruption has served as the catalyst for international efforts against corrupt politicians and public officials who have robbed the coffers of their states to the tune of billions of dollars. Laws to recover assets represent one of the major emerging jurisprudential issues on which countries of varying and different political ideologies can all agree, although in many western democracies the target is less the politician than the drug dealers, people smugglers and racketeers.
State Assets Recovery is often referred to as civil forfeiture and is a legal process to deprive a person of ill-gotten gains even where the person has not been convicted of any criminal offence. This method of recovery, while used in an increasing number of jurisdictions is controversial because it often places the citizen at a severe disadvantage. In the Republic of Ireland, for example, where the principle has been relatively successful based on that country’s peculiar circumstances, it is widely accepted that there has been a qualitative reduction of certain rights, including due process and compromising the presumption of innocence.
For Guyana, which has a long list of statutes providing for asset forfeiture, the more recent interest has centred on the recovery of funds properly belonging or owed to the State from politicians who have amassed considerable wealth while serving in political office.
And so it is that in July the APNU+AFC Government circulated a draft State Assets Recovery Bill 2016 (the Bill) claiming, disingenuously that the Bill is in compliance with the UN Convention against Corruption. In fact, the Bill does not contain several key recommendations in the Convention, including financing of candidates and political parties (Article 7), reporting by public officials of acts of corruption (Article 8.4); rules to prevent corruption among members of the judiciary (Article 11.1) and abuse of functions (Article 19), a malady that sooner rather than later affects everyone who occupies an office of power.
Remarkably, despite featuring in the name, “state asset” is not defined in the Bill and neither is “State property”, a term used liberally throughout the Bill; or “specified property” used in clause 18 which gives the Director the power to take action to recover State property.
More serious concerns arise when one examines the powers that the Bill vests in the Director. Essentially the Director can do “anything” which he considers appropriate or incidental to the discharge of his functions. His powers are much wider than that of the Director of the Asset Recovery Agency under the United Kingdom’s Proceeds of Crime Act on which this Bill is partly based. The Director can assume the functions of the Commissioner-General, the Commissioner of Police as well as the Director of Public Prosecutions. Most frighteningly, the Director can actually contract out the power, functions, and duties conferred on him under the Bill.
The provision granting the State Assets Recovery Authority (SARA) 25% of the fruits of its labour violates Article 216 of the Guyana Constitution; and gives the agency a direct interest in the funds raised. In the United States, the Police have been criticised for using a similar provision as a main source of funds, which its critics claim is widely abused.
The draft makes the Director a corporation sole. As a corporation sole, the Director is answerable to no one, although his actions will be subject to judicial review. His/her only reporting obligation is an annual report submitted through the subject Minister. The APNU and the AFC while in opposition lobbied successfully against the Director of the Financial Intelligence Unit being a de facto corporation sole and caused the introduction of the Anti-Money Laundering Authority.
The Schedule to the Bill provides that the person appointed as Director or Deputy Director of SARA shall be a fit and proper person. There are no specifications of what constitutes “fit and proper” but one of the criteria must include independence and exclude “politically exposed persons” – senior politicians and important political party officials.
This would immediately exclude Professor Clive Thomas, a co-leader of the Working People’s Alliance, a party in the ruling coalition. Professor Thomas had made expansive claims about the potential and prospects for SARA and represents its face in the public’s mind.
We should add as well, that it is dangerous to write ad hominem legislation. Instead of being tools, they become weapons.
The proposed Bill seeks to achieve far too many objectives: the reduction in crime, recovery of State Assets and the introduction of a system of civil asset forfeiture. The consequences of this over-ambitious approach are a frightening array of overlapping laws, concentration of power, violation of the Constitution and constitutional principles and a potential reduction of the civil liberties: due process and the presumption of innocence.
The architects of this Bill apparently did not think it necessary to tell Guyanese that the SARA concept and the corporation sole are taken from the Proceeds of Crime Act of the UK and that that model was deemed a colossal failure and abandoned, even after efforts at its improvement proved futile. Even in financial terms, it was costing almost three times more than the money recovered.
They do not tell us either, that the Anti-Money Laundering Act has extensive provisions on freezing and forfeiture of assets in relation to money laundering (29 sections), international cooperation (3 sections) and civil forfeiture (29 sections).
The Bill is seriously and conceptually flawed. It appears that the drafter was not sufficiently familiar with Guyana’s Constitution, its statutes and certain applicable legal principles. The powers given to a single person, with no reporting obligation other than an annual report to the National Assembly, free to conduct any operation he chooses and the manner in which the operation is executed, with the power to delegate his almost limitless powers to any person, makes a very dangerous cocktail.
Additionally, there are overlaps with several other substantive pieces of legislation and functions which mean that the possibility of SOCU, other investigative branches of the Police, SARA and the DPP engaging in simultaneous exercises is real. The Bill is silent on whether anyone, and if so who, must give way.
The Bill did not even receive a passing reference in the Minister’s Budget presentation.
Ram & McRae supports the imperative of recovering State assets from politicians, public officials and members of the private sector who unlawfully enrich themselves. We support strong measures against tax frauds. We also support the civil asset forfeiture concept. But extending these to all forms of a loosely defined concept of unlawful conduct is a step far too steep. It is dangerous and unworkable.
Finally, we call on the Government to show complete commitment to the UN Convention against Corruption by introducing legislation on donations to political parties and candidates. Business persons, large and small do not give for nothing. They expect corresponding favours in return. And there goes the rule of law.
It would be our recommendation that the Government set clear objectives and policies of what it seeks to achieve and meanwhile use existing mechanisms to pursue suspected acts of illicit enrichment, misfeasance and other violations using both the civil and criminal avenues. The Government would also need to remove overlapping functions between SARA and SOCU to make investigations more efficient and effective.
If the government were to persist with this Bill as is, it would be needlessly inviting a court challenge, thus setting back its own objective.