Archive for February, 2011

TIME Magazine quotes Ward & Ward Partner Mark Vlasic

February 20, 2011

TIME Magazine recently quoted Ward & Ward partner and Georgetown professor Mark Vlasic in an article discussing Switzerland’s role in freezing assets.  TIME relied on Vlasic’s expertise in stolen asset recovery to inform its understanding of a new Swiss law that makes freezing potentially stolen assets easier.

For Switzerland, it was a no-brainer. It didn’t even wait to be asked. Only two hours after Egyptian president Hosni Mubarak announced his resignation on Feb. 11, the Swiss government froze all the money he holds in the country’s banks. Now it plans to send it back to Egypt, where it can be used to do good.

Swiss authorities explained in a statement that the swift action on Mubarak’s wealth — and just how much of his reported multi-billion dollar fortune is deposited in Switzerland is not yet known — was taken “to avoid any misappropriation of Egyptian government assets.” And it was possible thanks to new legislation that went into effect on Feb. 1, making it increasingly difficult for plundering rulers to open accounts in Switzerland or lay claim to the assets hidden therein. The Restitution of Illicit Assets Act (RIAA) allows the government to immediately freeze and confiscate the funds of “politically exposed persons,” even if the implicated nation has not asked for the money back. Once returned to their country of origin, the funds must be used to improve quality of life, strengthen the judicial system, and fight crime.

“Normally, a foreign country lodges an official request when it seeks to find and freeze the illegally obtained assets of one of its corrupt officials,” explains James Nason, spokesman for the Swiss Banking Association (SBA), an umbrella group for the country’s financial institutions. “This Act was designed to deal with situations involving countries that have no functioning legal system and can’t competently follow through with any judicial procedure.”

Experts say the law will help Switzerland shake off its reputation as a place where bad guys go to hide their ill-gotten gains. Only two years ago, the country was placed on the OECD’s “gray list” of tax havens that failed to meet international transparency standards (it has since been removed from the list). Now Switzerland is a trailblazer in the quest to return stolen assets to developing nations. “Passing such a forward-leaning law is not easy,” says Mark Vlasic, a professor at Georgetown University in Washington D.C. who served as head of operations of the World Bank’s Stolen Asset Recovery Initiative and is now an international legal adviser to the Charles Taylor/Liberia asset recovery team. “It goes a long way in showing Switzerland’s intent to be on the right side of history when it comes to fighting grand corruption and kleptocracy.”

The Foreign Ministry devised the legislation because of its experience with former Haitian president Jean-Claude Duvalier, who stashed about $5.8 million of looted money in Switzerland. After “Baby Doc” was overthrown in 1986, the Swiss froze his assets. Then in 2010, following 24 years of legal wrangling, a Swiss court ruled that the money should be returned to Duvalier. However, since he couldn’t prove that he had earned the money legitimately, the Foreign Ministry blocked the release of funds and scrambled to devise and pass the RIAA. Under the new law, the confiscated assets will, according to the Department of Foreign Affairs’ website, “be returned to Haiti in order to improve the living conditions of the people.” The law stipulates that Switzerland and the country to which the money is returned should agree on the programs of public interest that will be financed with the assets, or the Swiss government can also return the money through international or national organizations.

This is really just a new twist on Switzerland’s long-standing tradition of restitution. So far, the country has returned $1.5 billion of plundered funds to their countries of origin — including Nigeria, the Philippines and Mexico — more than any other financial center of a comparable size. And long before RIAA went into effect, Switzerland had already enacted laws and procedures to combat money laundering and corruption. “Swiss banks must follow very strict procedures when they start a business relationship with a ‘politically-exposed person’,” says SBA’s Nason. “They must monitor that client’s financial activity and clarify any unusual transactions. But unlike many other countries, Swiss banks don’t have to wait for a court order to freeze suspicious accounts – they can act on their own initiative.” When Swiss banks detected suspicious activity on the account held by disgraced Peruvian spy chief Vladimiro Montesinos in 2000, for example, they reported it to the authorities and froze the assets, as they are obliged to do under Switzerland’s anti-money laundering laws. The same thing happened with Taiwan’s former president Chen Shui-bian in 2008.

But experts say Switzerland wouldn’t have to work so hard at fighting corruption if the banks in other countries were more careful about whose money they accept. When the government investigated the case of Nigeria’s former leader Sani Abacha, for example, they discovered that a substantial portion of the $700 million he had stashed in Swiss accounts had first gone through banks in the U.S. and the U.K. Funds of criminal origin often come to Switzerland from other countries where “know-your-customer” rules are not as strict, Nason says, pointing out that Swiss financial institutions must have detailed information not only about the account owner but also about their beneficiaries and those holding power of attorney over the assets. “In Britain, you can verify your identity when opening a bank account by showing a utilities bill with your name and address on it,” he says. “If you tried that in Switzerland, you would be laughed out of the bank.”

Ward & Ward Partner and Georgetown Professor Mark Vlasic Invited to Speak at the International Association of Prosecutors Conference in Brazil

February 11, 2011

Ward & Ward Partner and Georgetown Professor Mark Vlasic was invited to speak at the International Association of Prosecutors Regional Conference in Brazil. Professor Vlasic will focus his discussion on anti-corruption issues and international asset recovery.

DEVEX Calls Ward & Ward Partner and Georgetown Professor Mark Vlasic an “International Development Renaissance Man”

February 11, 2011

Ward & Ward Partner and Georgetown Professor Mark Vlasic was referred to by DEVEX as an “International Development Renaissance Man” in a recent profile highlighting Professor Vlasic’s international law and development efforts around the world.

International Development Renaissance Man: Mark Vlasic

A modern-day polymath, Washington-based international lawyer and Georgetown University professor Mark Vlasic brings experiences in the public, private, military and academic worlds to the courtroom, boardroom and classroom.

Vlasic’s study of Jesuit theology at Georgetown and service in the U.S. Army first stoked his sense of obligation to humankind. Helping to prosecute Slobodan Milosevic and other genocide cases at the U.N. war crimes tribunal in The Hague, Netherlands, Vlasic saw “the darkest side of humanity.” He cited the passage from Romans 12:21 — “do not be overcome by evil, but overcome evil with good” — as a guiding philosophy for his work.

What binds his many professional roles is his mission to make good governance and the rule of law key elements of international development. As head of operations for the joint World Bank and United Nations Stolen Asset Recovery Initiative, or StAR, Vlasic worked with the Swiss and Haitian governments to help return funds plundered by the country’s former ruler, Jean-Claude “Baby Doc” Duvalier.

“I think the fight against impunity for war crimes began at Nuremberg some 65 years ago, and I think that the fight against impunity for economic crimes and specifically the global effort to recover stolen assets began when [World Bank President] Robert Zoellick and [U.N. Secretary-General] Ban Ki-moon launched the StAR Initiative at the U.N. General Assembly in September 2007,” he said, praising Zoellick for making StAR his “first initiative” at the bank. “Thus, while there have been some early reasons for optimism in the effort to return stolen assets to developing countries, the path ahead is fraught with challenges, and it is only through the political will of individual leaders – both political leaders and technical experts working on specific cases – that will lead to a landscape where there is no safe haven for stolen assets.”

Vlasic, who is now in private practice, is serving as international legal adviser to the Liberia Asset Recovery Team, which is seeking to recoup funds embezzled by Charles Taylor. The former Liberian president is currently on trial for war crimes in The Hague.

Ward & Ward Partner and Georgetown Professor Mark Vlasic Publishes Op Ed in the Washington Times

February 11, 2011

Ward & Ward partner and Georgetown professor Mark Vlasic published Haiti Has Lessons for Tunisia, a Washington Times Op Ed that argues that Tunisia might be able to learn lessons from Haiti in coming to grips with its former dictator and its possible efforts to recover stolen assets.

VLASIC & COOPER: Haiti has lessons for Tunisia
Both nations need to come to grips with their kleptocratic pasts

When Tunisian President Zine el-Abidine Ben Ali abruptly fled Tunisia‘s chaos,becoming an exile of a nation that he and his wife reportedly used as their personal cookie jar, it was deja vu all over again.

Amid rumors that Mr. Ben Ali fled along with 1.5 tons of gold (worth approximately $65 million), his escape seems eerily reminiscent of president-for-life Jean-Claude “Baby Doc” Duvalier’s escape from Haiti. According to reports, it appears that both leaders fled aboard aircraft filled with stolen loot from countries that had endured nearly two decades of corruption and nepotism under their regimes. In a mysterious turn of events and after 25 years in exile, Mr. Duvalier recently returned to Port-au-Prince as Swiss and Haitian officials are working to return millions of his frozen assets to Haiti. Considering the similarities, one must ask: Can post-Ben Ali Tunisia learn something from post-Duvalier Haiti?

Much like post-Duvalier Haiti, Tunisia is in a fragile state, and after an attempt to create a unity government with opposition leaders, it is clear that events that will define its future are still in motion. When the dust settles and a stable government is formed, one of the major questions it will face will be whether it will follow Haiti‘s lead in trying to achieve some measure of justice by attempting to recover allegedly ill-gotten gains accumulated by the Ben Ali family.

Indeed, concerns about high-level corruption were among the reasons for the uprising in Tunisia, so it stands to reason that any new government would be well-served by launching a proper investigation into the allegations of malfeasance that have arisen.

In a matter of days since Mr. Ben Ali‘s quick departure, his international assets are being identified and targeted abroad. In France, President Nicolas Sarkozy‘s office announced it would block all “suspicious” movements of the Ben Ali family’s assets, preventing their liquidation or transfer out of the country. Similar actions are being taken in the United States. In Canada, there are reports of Tunisian expatriates protesting outside a $2.5 million stone mansion that is purported to be the property of Mr. Ben Ali‘s 30-year-old son-in-law. And in Switzerland, a country recognized for being forward-leaning in helping recover stolen assets (including passing a law to help repatriate Duvalier-related funds to Haiti), the Swiss Federal Council decided to block “with immediate effect” any possible funds in Switzerland of Mr. Ben Ali and his associates.

These are welcome steps forward – and a testament to a new era of fighting impunity – in which alleged kleptocrats are no longer openly welcomed by private banks and Western governments – but rather, sovereign states and political leaders step in to ensure that, as World Bank President Robert B. Zoellick put it, there are “no safe haven* for those who steal from the poor.”

But a full accounting of Mr. Ben Ali‘s wealth has yet to be revealed – and it will take time and sustained political will by any new Tunisian government to run all leads to an end. Indeed, it took years for Haiti to commence a sustained effort to recover Duvalier-related assets.

Unfortunately, political will on the part of a post-kleptocratic government is one of the rarest, yet most necessary, ingredients for successfully recovering illicit assets. And even should a new Tunisian government be willing to investigate the former president’s assets, identifying and recovering stolen assets is far from easy.

This is one of the reasons Mr. Zoellick made the Stolen Asset Recovery (StAR) Initiative, a global partnership to help recover assets from past dictators, his first initiative after joining the World Bank. Mr. Zoellick and his colleagues recognized that grand corruption – not unlike the alleged corruption in the cases of Mr. Duvalier and Mr. Ben Ali – is a global issue that demands a global response.

According to Jean-Pierre Brun, the lead author of new StAR handbook on recovering stolen assets, “the [asset recovery] process can be overwhelming for even the most experienced practitioners. It is exceptionally difficult for those working in the context of failed states, widespread corruption, or limited resources.” Thus, for Tunisia, any quest to recover stolen assets will not be simple. But it is not the only country to face such challenges.

Over the past few years, the Haitian government has been working quietly with officials from Switzerland and the StAR Initiative to help recover assets purportedly stolen by Mr. Duvalier (indeed, such efforts likely prompted Mr. Duvalier‘s sudden return to Haiti). And even though time-consuming, Haiti is on track to possibly recover millions of dollars of assets that are frozen in Swiss bank accounts – bringing some sense of justice to a country sorely in need of good news.

Thus, with the recent departure of Mr. Ben Ali comes the possibility of a new chapter for Tunisia – one in which corruption does not dominate the country – and in which the rule of law plays a central role in society. Should the new government decide to enter into the world of asset recovery, it should do so knowing that the success of such operations depends a great deal upon the political willpower of the successor government to sustain its recovery efforts. Let us hope the new leaders in Tunisia are statesmen, emboldened by the examples of Haiti and others to continue their fight against corruption, and that future dictators and kleptocrats around the world take notice. For it is only by collective and targeted international action that we can ensure that there will be no safe haven for stolen assets.

Mark V. Vlasic, an adjunct professor of law at Georgetown University, worked on the Haiti/Duvalier asset recovery team while serving as head of operations of the World Bank’s StAR Secretariat. Greg Cooper is a law student at the University of Texas.

Ward & Ward Partner and Georgetown Professor Mark Vlasic Publishes Op Ed in the Huffington Post

February 11, 2011

Ward & Ward partner and Georgetown professor Mark Vlasic published 5.7 Million Reasons for Duvalier to Return to Haiti, a Huffington Post Op Ed regarding stolen asset recovery and possible reasons for “Baby Doc” Duvalier’s return to Haiti.

5.7 Million Reasons For Duvalier to Return to Haiti

After twenty-five years in comfortable exile, what convinced former president Jean-Claude “Baby Doc” Duvalier to leave France and return to earthquake-shattered Haiti? Supporters will claim that he returned to help re-build his country. But if so, why did he choose to return a year after a 7.0 earthquake struck his homeland? The answer likely has little to do with a small island in the Caribbean trying to dig itself out of poverty — and much more to do with a small country in the Alps better known for its watches, chocolate and ski resorts.

That’s because the “Return of Illicit Assets Act” (RIAA), passed by the Swiss Parliament last October, comes into effect this week.

But why would Duvalier, a Haitian living in France, care about a law change in Switzerland?

Money — that’s why.

You see, the Swiss government maintains an “assets freeze” on over $5.7 million of Duvalier-related bank accounts in Switzerland. And while Duvalier has been fighting the assets freeze for years — trying to stop the Swiss from confiscating his allegedly ill-gotten gains — the law that takes effect this week paves the way for returning his assets to Haiti — thus completing an asset recovery effort that began in 1986.

Duvalier’s return to Haiti, just as another alleged kleptocrat, former president Zine al-Abidine Ben Ali of Tunisia, fled his own country, evoked memories of déjà vu to many in the asset recovery world.

Taking over as “president-for-life” after his father’s death, Duvalier’s rule was characterized by greed and neglect. For 15 years, Duvalier and his associates allegedly stole Haitian funds and international aid money while ordinary Haitians grew poorer and poorer. Only when faced with the near-total breakdown of the Haitian state, rioting, and a potential coup d’état did Duvalier flee the country.

Similar to reports that Ben Ali left Tunisia on a jet with millions of dollars in gold coins, Duvalier reportedly left Haiti in a jet filled with gold, jewels and artwork, leaving (like Ben Ali) a chaotic and economically scarred nation behind.

Since then, it has been left to Duvalier’s successors in Haiti and a handful of diligent officials in Switzerland, aided by the joint World Bank-United Nations Stolen Asset Recovery (StAR) Initiative, to try to recover Duvalier’s assets for the benefit of the Haitian people.

Unfortunately, corruption in Haiti and Tunisia are not isolated issues. According to World Bank estimates, corruption among holders of public office accounts for the misappropriation of between $20 and $40 billion each year. This corresponds to 20-40 percent of annual global development aid.

Because of this, there has been greater attention focused on stolen asset recovery as a critical component in the fight against impunity that is so often associated with grand corruption. This was one of the reasons President Robert Zoellick made the StAR Initiative, a global partnership to help recover assets from past dictators, his first initiative after joining the World Bank. And this is one of the reasons that so many in the development and anti-corruption fields have been waiting patiently for Switzerland’s RIAA to come into effect.

The Swiss law, also known as “Lex Duvalier,” was designed for cases involving assets frozen in Switzerland which have been acquired unlawfully, but which cannot be returned via typical mutual legal assistance channels due to failures in the victim state’s judicial system.

In such cases, where the country involved renders it impossible to conduct a proper exchange procedure, the Swiss law would enable a unique “burden shift.” In these cases, should RIAA be implemented as envisioned, officials would only have to show that the funds held in Switzerland by an alleged corrupt official are significantly larger than what someone could have credibly earned in office, and that the country from which the funds originate was known to be corrupt.

Then the burden of proving that the money came from legal sources would lie with the allegedly corrupt official, rather than the Swiss state. If the official could not prove a legitimate origin of his or her Swiss assets, they would be confiscated by the state.

It is likely that Duvalier returned to Haiti in order to throw a wrench into the new law’s application, perhaps hoping that by re-entering Haiti, he could challenge the use of the law, or possibly strike a deal that could allow for a return of his assets to Haiti, but in a manner that might better position him for a future presidential bid. For the moment, however, it looks like his plan has backfired, and he may finally face justice in Haiti. Should that happen — and Duvalier’s assets are finally returned to Haiti – it may give life to President Zoellick’s assertion that “there should be no safe haven for those who steal from the poor.”

Ward & Ward Partner and Georgetown Professor Mark Vlasic Participates in NATO Summit

February 11, 2011

Ward & Ward partner and Georgetown professor Mark Vlasic was selected by the Atlantic Council to represent the United States at the Young Atlanticist Summit, as part of the NATO Summit in Lisbon, Portugal. While in Lisbon, Professor Vlasic chaired a post-Summit panel discussion on “Assessing the NATO Summit.”

The Young Atlanticist website promoted the summit, saying:

The Young Atlanticist Summit in Lisbon will bring together top young leaders from NATO, Partnership for Peace, and Mediterranean Dialogue countries in conjunction with the 2010 NATO Summit. Here, these Young Atlanticists will meet with heads of state and senior NATO officials, with whom they will discuss the Strategic Concept and the issues facing the Alliance. Participants will also engage in discussion with one another about their views on NATO and its future.

In addition to these meetings, our delegates will be providing their unique insights on the happenings of the Summit, which they will be sharing here throughout the summit. Please check in regularly for delegate blog posts, photo updates and video coverage of select meetings – your inside track to the Young Atlanticist Summit!