Why economic crimes should be prosecuted as international crimes

Saudi Arabia's Crown Prince Mohammed Bin Salman and Saudi Prince Miteb bin Abdullah take part in the Annual Horse Race ceremony, in Riyadh, Saudi Arabia, December 30, 2017. Picture taken December 30, 2017. Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY.

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Editor's note:

Despite the effects of corruption being as devastating as ‘accepted’ international crimes, writes Mia Swart, economic crimes are too pervasive to be seen as special. This piece originally appeared in Business Day.

In November this year, the news of the anti-corruption drive in Saudi Arabia which led to the arrest of several prominent members of the political and business elite, surprised many. And in late December the news broke of the sentencing of the former vice-president of Iran, Hamid Baghaei for the misuse of public funds while in office. Baghaei received a sentence of 63 years, which is the longest sentence an official has received in Iran in many decades.

Does this indicate a new resolve in the Middle East to prosecute corruption?

At first blush this might look like the beginning of a wider attempt to clean up corruption in the region, but this would be an overstatement. There seems to be consensus among commentators that the arrests in Saudi Arabia were politically motivated — an attempt by Prime Minister Mohammad bin Salman to tighten his grip on all branches of government and to destroy all networks likely to oppose his power.

The arrests of members of the business elite signals to business that it should privilege certain networks and in no circumstances benefit those who have seditious goals. Salman has dismissed the claims that the anti-corruption drive was a power grab and considers the prosecutions a vital part of economic reform, which, in turn, forms part of his national transformation programme. He justified his decision by referring to the extent of corruption in Saudi Arabia — roughly 10% of all government spending is lost due to corruption each year.

In the case of Iran there are similar reasons for being skeptical of the reasons for the conviction of Baghaei. He served as vice-president under Mahmoud Ahmadinejad, and was long considered one of Ahmadinejad’s closest confidants. The sentencing of Baghaei should be understood against the backdrop of the perennial tensions between the judiciary and the political leadership in Iran.

In the aftermath of the sentencing, Ahmadinejad called Iran’s chief justice, Ayatollah Sadeq Amoli Larijani, “incompetent”.

In sharp contrast with the conviction and heavy sentence, Iran has not prosecuted any of the members of the current or former governments for international crimes. This is in line with the broader trend in the Middle East to shy away from prosecuting international crimes for the so-called core international crimes of genocide, crimes against humanity, and torture.

Egypt, for example, has prosecuted those who committed economic crimes both before and after the failed 2011 “revolution”, but there are no prosecutions in the pipeline for the perpetrators of ongoing core international crimes.

The kind of corruption those like Baghaei are accused of is called “grand corruption”, which is the abuse of high-level power that causes serious and widespread harm to individuals and society. What further distinguishes grand corruption is that it is systemic and becomes part of the very political and legal systems meant to combat it. Ordinary corruption has been likened to an illness that affects the body of the state and grand corruption to cancer that turns the very tissue of the state against itself.

Universally, grand corruption is punished less often than lower-level corruption. In SA, this form of corruption has become so common that the term corruption has become almost synonymous with grand corruption.

Over the past decades, an increasing number of international lawyers have grappled with the question of whether corruption should be considered an international crime. One of the most compelling arguments for it being elevated to such status is that the effects of corruption can be as devastating as those of the ‘accepted’ international crimes.

Sadly, economic crimes are too pervasive to be seen as special. Although transnational corruption has, in recent years, been elevated to an international offence, it still does not have the status of international crime and it is not considered serious enough for heads of state or cabinet members to be prosecuted in foreign jurisdictions by means of universal jurisdiction.

The recent indemnity/immunity deal struck with former Zimbabwe president Robert Mugabe and the ongoing delay and obstruction of the National Prosecuting Authority in prosecuting President Jacob Zuma shows that in Southern Africa, far from being prosecuted, political leaders are rewarded for corruption. The deal struck between Mugabe and the military includes immunity from prosecution — including prosecution for economic crimes — for him and his family.

In the case of Zuma, there have been ongoing rumors that he has been approached to accept money and immunity in exchange for stepping down.
The criminal prosecution of heads of state will never be uncontroversial and will always have to escape the charge of being politically motivated. The corruption prosecutions in the Middle East are highly controversial but in light of the whole-scale immunity offered in Southern Africa, it might, nevertheless, be wise to follow developments in the beleaguered Arab world.