Fighting the ‘International Thief Thief’ with Global Magnitsky Sanctions

(Editor’s Note: This article is the second of a Just Security mini-series adapted from recent testimony before the U.S. House of Representatives Tom Lantos Human Rights Commission regarding the reauthorization of the Global Magnitsky Act on March 24, 2021. All articles in the series can be found here.)

In his day, the late, great Nigerian musician and Afrobeat innovator Fela Kuti was, among many other things, an anti-corruption and human rights activist. Not unlike Sergei Magnitsky, Fela fought back against corruption and suffered terribly at the hands of the State. And now, decades after Fela decried “International Thief Thief,” his son Femi is singing “You Can’t Fight Corruption With Corruption” on a new album.

This generational continuity underscores the persistent nature of corruption. Too often, the United States and its allies have fought corruption in contradictory and counterproductive ways, allowing problems to fester and metastasize. In recent years, however, the international community in general – and the United States in particular – has become more targeted in this fight. The sanctions regime under the Global Magnitsky Act (or “GloMag”) represents one of the most important tools – and to be clear, GloMag is a tool, not a policy or strategy in itself – in the global fight against corruption and human rights abuses. For the purposes of this article, GloMag refers to targeted sanctions imposed by the U.S. Treasury or State Department in response to serious human rights abuse or acts of corruption.

GloMag is at the center of two major recent foreign policy successes, where potentially very negative outcomes – full-scale war and wholesale subversion of democracy – were averted in part through use of these pressures. The consistent use of network-focused GloMag sanctions (i.e. Treasury sanctions targeted at more than just one individual but rather an individual along with business partners, proxies, and companies)  in conjunction with other tools serving broader policies, has been key to this progress.

The first case of note is South Sudan, where the civil war that erupted in late 2013, just two years after the country’s founding, had reached devastating levels by late 2017. While many in the international community acknowledged that corruption was at the center of ongoing atrocities, little action had actually been taken to combat this corruption. In September 2017, that began to change when the U.S. government began pressuring key actors and sectors in South Sudan.

First, the United States designated three individuals and three companies under the South Sudan sanctions program and issued an anti-money laundering advisory from the Financial Crimes Enforcement Network (FinCEN). The United States then issued GloMag designations against financier Benjamin Bol Mel and his companies in December 2017 because of Bol Mel’s role in providing funds to President Salva Kiir through a range of corrupt means. Over the next couple of years, these steps were followed with action from the U.S. Department of Commerce, a visit by then-Treasury Undersecretary Sigal Mandelker to the region, and a series of four more GloMag designations, including against five individuals responsible for the kidnapping and murder of two South Sudanese activists.

These actions contributed to a diplomatic process that led to the formation of a unity government. Although the conflict’s root causes have yet to be addressed, full scale war has not resumed. Based on The Sentry’s observations through engagement with diplomats, observers, and the financial sector, it is our view that this success is due in part to the fact that, thanks largely to GloMag, the country’s leaders are experiencing consequences for their destructive actions for the first time.

A second valuable case study comes from the Democratic Republic of the Congo (DRC). By 2016, there was significant fear that then-President Joseph Kabila would change the constitution to run for a third term. Though Kabila’s reign had been marked by massive corruption and pervasive human rights abuses, the international community had done little to intervene.

Beginning in mid-2016 and continuing through 2017, the U.S. government, European Union, and others began to exert pressure through the DRC sanctions program, visa bans, and diplomatic engagement by senior U.S. officials. Then in December 2017, the United States took its strongest action to date when it sanctioned longtime Kabila financier and enabler Dan Gertler, as well as his business partner and numerous companies in their network, under GloMag.

In June 2018, GloMag was again used against 14 Gertler companies, and Gertler featured in a FinCEN Advisory about corrupt enablers of human rights abusers. In the end, Kabila did not change the constitution and did not run for re-election in December 2018. Though the elections were far from free and fair, Kabila’s handpicked successor was trounced in the elections.

When Gertler was able to secure an unprecedented reprieve that effectively eliminated the impact of his GloMag designations in the final days of the Trump Administration, there was fear in the DRC and around the world that these gains would be lost. Although this one-year license that provided Gertler access to U.S. banks and global financial institutions caused damage, its revocation by the Biden Administration—following strong bipartisan pressure from Congress and a concerted civil society effort—was an important correction. While more follow-up is needed, Gertler’s all-out push against the GloMag sanctions helped to show us all just how effective, as well as how precarious, they can be.

From these illustrations, we can glean a few reasons why GloMag has been so effective. In the case of GloMag sanctions related to South Sudan and the DRC: the focus was on targeting networks, rather than one or two individuals; there were multiple follow-up designations in each case; and the GloMag sanctions were just one tool of many used – from country-specific sanctions programs to anti-money laundering (AML) actions by FinCEN to visa bans to diplomatic engagement – with GloMag playing a role that other tools could not.

In addition to these case-specific takeaways, there are several other notable elements to GloMag:

  • Support to whistleblowers and human rights defenders. The recent outrageous death sentences handed down in absentia on two DRC whistleblowers who provided critical information about Gertler and his companies only reinforces how important GloMag has been to enabling this inspiring work. When defenders and whistleblowers see their efforts come to specific fruition through designations, it provides needed validation and encouragement. Moreover, when defenders and whistleblowers around the world see GloMag used against officials who targeted South Sudanese activists, it demonstrates that the United States see their protection as a vital policy goal.
  • The multi-stakeholderization of designations. A coalition of NGOs and civil society actors, led by Human Rights First and Freedom House, submit information and recommendations for new GloMag sanctions designations. This coalition approach is a unique innovation, rooted in what Congress provided in the Global Magnitsky statute. Both organizations deserve credit for their leadership, as do the U.S. Treasury and State Departments. Especially for the Office of Foreign Assets Control (OFAC) – which I say as a proud Treasury alum – public engagement is not always a strong suit, and participating in calls between OFAC officials and dozens of civil society activists has been inspiring. We at The Sentry have also been grateful for the response and attention from Treasury and State Department officials when we have submitted dossiers and seen them lead to action.
  • Enabling other tools to counter corruption and human rights abuse. Although sanctions should not simply be a form of de facto accountability, their use to directly target networks of bad actors enables more effective due diligence by banks and the stronger development of responsible business practices overall.

There remain improvements that must be made to the GloMag program and effort, and we hope that the Tom Lantos Human Rights Commission hearing and broader reauthorization process, as well as continued strong congressional oversight, can bring those to bear. Potential improvements include the initiation of more civil penalty enforcement cases by OFAC and the adoption of an increased funding stream for implementation at OFAC.

Fela’s son, Femi, has another song on his recent album called “As We Struggle Everyday,” in which he sings: “As we struggle every day / We try to find a better way.” The success of GloMag and the need for its reauthorization is a testament to the struggle and hard work of thousands of civil society activists around the world, working closely and carefully with congressional leaders and staff, as well as with the Treasury and State Departments and now other governments around the world. We still have a long way to go in the fight against corruption and human rights abuses, but reauthorizing GloMag is one clear step Congress can take to help all of us find a better way.

Image: A man and a woman hold placards during an anti-corruption protest march along Borrowdale road, on July 31, 2020 in Harare.  (Photo by ZINYANGE AUNTONY/AFP via Getty Images)

 

About the Author(s)

Brad Brooks-Rubin

Brad Brooks-Rubin is General Counsel at The Sentry, an investigative and policy team that follows dirty money connected to African war criminals and transnational war profiteers and seeks to shut those benefiting from violence out of the international financial system.