After the fall of long-time autocrats comes the hunt for their hidden loot. Libyan dictator Muammar Gaddafi may be the wealthiest of all, since he is said to control over $150 billion.
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After the fall of long-time autocrats comes the hunt for their hidden loot. The wealth of former Tunisian president has been estimated at $7 billion, which pales in comparison with that of his Egyptian counterpart, at least if we are to believe the chant of crowds: "Oh, Mubarak tell us where you got 70 billion dollars." Libyan dictator Muammar Gaddafi may be the wealthiest of all, since he is said to control over $150 billion.

Those numbers are no doubt exaggerated as well as imprecise, for they may or may not include the fortunes amassed by extended families and a more or less extensive network of cronies. Even if we remove a zero or two from these estimates, the amounts accumulated following long political tenures are likely to be quite substantial and the fight for their recovery will by waged on a variety of fronts, political and legal.

The preoccupation with the recovery of illegally acquired wealth began following the near-simultaneous ousting of two notorious kleptocrats, Ferdinand Marcos of the Philippines and Jean-Claude Duvalier of Haiti in February 1986. Another spurt of interest in the whereabouts of dictators' loot occurred in the late 1990s after the overthrow of Mobutu Sese Seko, President of Zaire (now the Democratic Republic of the Congo), and the sudden death of Nigerian dictator Sani Abacha. This is when the notion of "politically exposed persons" (or P.E.P.) appeared in the anti-money laundering apparatus. Financial institutions were instructed to enhance the monitoring of accounts belonging to political figures and their entourage, considering their possible involvement in bribery and corruption.

But soon after September 11, 2001, the "financial war on terror" took center stage. The easiest way to seize the money of an individual, a group or a country was to find a link to terrorism. When following the collapse of Iceland's banking system, British Prime Minister Gordon Brown attempted to recover funds lost by British citizens in failed Icelandic banks, he used anti-terrorist laws - effectively designating Iceland as a terrorist state - to freeze that country's assets in the United Kingdom.

Those "politically-exposed persons" who were on the right side of the war on terror, among them Ben Ali, Mubarak, and Gaddafi, were implicitly exempted from financial scrutiny (though their domestic enemies, particularly among Islamic organizations, were not) at a time when their economic policies, or in the case of Gaddafi the price of oil, provided them with unprecedented opportunities for personal enrichment.

In the old days, kleptocrats simply looted their countries' coffers and siphoned off the proceeds of foreign aid. Central banks functioned as their personal piggybanks. The favorite destination of ill-gotten wealth was Swiss bank accounts. Despite massive efforts to find hidden assets (which included pressure placed on Switzerland by the United States to loosen its bank secrecy laws), only a tiny part of the alleged loot of Marcos, Duvalier, Mobutu, Abacha and others has been located. This is due to a number of factors: the initial figures may have been grossly exaggerated; considerable "leakage" occurred during the laundering process, with countless intermediaries taking their cut; and the process of hiding the wealth was opaque as well as ingenious. In most instances, long-drawn litigation involving multiple claimants is still going on.

In many respects, Muammar Gaddafi is one of those old-fashioned kleptocrats. At least until 2004, when British Prime Minister, acting on behalf of the "international community" offered him "the hand of friendship," he had a free rein in running the financial affairs of his oil-rich, sparsely populated, country. The hollowed-out political system and the relatively recent appearance of foreign investors and international organizations explain the near absence of the apparatus that has come to define the new kleptocracies.

Both Ben Ali and Mubarak have shunned the antics and idiosyncrasies of traditional despots in favor of a technocratic style. Although some of the old practices persist (it is rumored that Ben Ali and his wife, prior to fleeing Tunisia, helped themselves to 1.5 ton of gold worth $60 million from the central bank), the new kleptocrats got rich primarily by taking advantage of "business opportunities" in a system they tightly controlled. And with their wealth and connections, they could afford the best legal and financial advice on investing and shielding their fortune.

The new kleptocrats moved their economies further away from state control and integrated them in the global economy, earning in the process the encouragement and praise of the international financial community. Privatization transferred state monopolies, Russian-style, to a new class of oligarchs. Foreign investment and financial liberalization worked to the advantage of a new elite centered around the ruling dynasties. In the words of a U.S. embassy cable revealed by WikiLeaks, "Seemingly half of the Tunisian business community can claim a Ben Ali connection through marriage, and many of these relations are reported to have made the most of their lineage." In Egypt, the emblematic figure of economic modernization was Gamal Mubarak, the one-time heir apparent, who made his career not in politics but in investment banking and private equity.

Political repression was the flip side of these policies. Democracy would threaten those cozy arrangements. Also, the investment community craves stability and predictability, and the long-time rulers of Tunisia and Egypt provided both, in spades. The national security argument provided the necessary cover--as well as a justification for defense expenditures with their rich potential for commissions and kickbacks.

Ibrahim Warde is an adjunct professor at the Fletcher School of Law and Diplomacy, Tufts University. He is author of The Price of Fear: The Truth behind the Financial War on Terror (University of California Press).

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