The Problem and a Path to a Solution
Theft of public assets from developing countries is an immense problem with a staggering development impact. These kinds of thefts mean valuable public resources are diverted from addressing the abject poverty and fragile infrastructure so prevalent in these countries. The international community cannot stand idly by and allow corrupt leaders to engage in such criminal conduct with impunity or to enjoy their ill-gotten wealth. Although the exact magnitude of the proceeds of corruption circulating in the global economy is impossible to ascertain, estimates demonstrate the severity and scale of the problem. The proceeds of crime, corruption, and tax evasion are estimated to represent between $1 trillion and $1.6 trillion annually, with half coming from developing countries.5 These estimates do not capture the societal costs of corruption and the devastating impact of such crimes on victim countries. Theft of assets by corrupt officials weakens confidence in public institutions, damages the private investment climate, and reduces the funds available for core investment in public health, education, and other poverty alleviation measures.6 Given the billions of dollars stolen by political leaders and other high-ranking officials in developing jurisdictions, the World Bank and the United Nations Office on Drugs and Crime (UNODC) initiated the Stolen Asset Recovery (StAR) Initiative in 2007 to assist countries with recovering and returning these stolen assets to victim jurisdictions. StAR is focused on instances where corrupt leaders, other officials, and their close associates are responsible for stealing millions, if not billions, of dollars. This grand corruption typically derives from acts of theft, embezzlement, bribery, and other criminal conduct. Although the StAR Initiative is not aimed at petty and mild corruption, it recognizes that some of the recommendations discussed in this study can help practitioners be more effective in investigating and prosecuting all types of corruption. Officials with StAR estimate that only $5 billion in stolen assets has been repatriated over the past 15 years. The huge gap between even the lowest estimates of assets stolen 5. United Nations Office on Drugs and Crime, “Stolen Asset Recovery (StAR) Initiative: Challenges, Opportunities, and Action Plan” (Washington, DC: World Bank 2007), citing Raymond Baker, Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System (Hoboken, NJ: John Wiley & Sons, Inc., 2005). 6. UNODC and World Bank, “Stolen Asset Recovery (StAR) Initiative: Challenges, Opportunities, and Action Plan,” p. 9.
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