A report in major US newspaper The New York Times has claimed that the Maldives government is seeking to seize US$400 million allegedly stolen by the former government, assisted in its recovery efforts by the Stolen Asset Recovery Initiative (StAR).
StAR is a joint initiative of the World Bank and the United Nations, which claims to have recovered US$5 billion over the past 16 years. It estimates conservatively that between US$20-40 billion is stolen annually from developing countries “through bribery, misappropriation and corruption – about 15 percent to 30 percent of aid to the developing world.”
In the Maldives, a number of politically-connected figures, including former President Maumoon Abdul Gayoom, had now become the targets of “increasingly coordinated efforts to repatriate misappropriated funds,” the NYT report said.
“Results to date have been encouraging, but much more can be done,” the NYT said, citing “officials and development experts.”
Representatives of the former government have steadfastly denied the existence of stolen funds. Gayoom’s assistant and former chief government spokesperson Mohamed Hussain Shareef (Mundhu) told Minivan News in December that “there is no evidence to link Gayoom to corruption”, and urged accusers “to show us the evidence.”
“If you have the details make them public, instead of repeating allegations,” he said. “[The former president] has said, ‘go ahead and take a look, and if you find anything make it public.’”
Friday’s report in the NYT described the Auditor General’s report, published in 2009, as “a guidebook on self-enrichment.”
“An estimated US$9.5 million was spent buying and delivering a luxury yacht from Germany for the president; $17 million was spent on renovations of the presidential palace and family houses. Mr Gayoom built a saltwater swimming pool, a badminton court and a gymnasium, and he bought 11 speed boats and at least 55 cars — including the country’s only Mercedes-Benz,” the NYT noted.
“And the list goes on, from Loro Piana suits and trousers to watches and hefty bills for medical services in Singapore for ‘important people and their families. There was a US$70,000 trip to Dubai by the first lady in 2007, a US$20,000 bill for a member of the family of the former president to stay a week at the Grand Hyatt in Singapore. On one occasion, diapers were sent to the islands by airfreight from Britain for Mr Gayoom’s grandson.”
The Auditor General Ibrahim Naeem was dismissed in late March by an opposition-controlled parliament (Majlis) following a no-confidence motion and allegations of corruption.
Naeem, who was himself appointed by the former president and a then-ruling party majority Majlis, claimed at the time that the charges were an attempt to discredit his office and prevent him from reclaiming the government’s money stored in overseas bank accounts.
“A lot of the government’s money was taken through corrupt [means] and saved in the banks of England, Switzerland, Singapore and Malaysia,” Naeem said in March, during his first press conference in eight months.
The Maldives government has meanwhile “begun the paper chase”, Friday’s NYT report claimed, “but it lacks the resources to unravel a complex trail that it assumes runs through the British Channel Islands, Singapore and Malaysia.”
“Much of the looted money ends up in complex corporate structures and bank accounts held by associates offshore, making it hard to identify the beneficial owners. This raises the issue of tightening regulation of service providers and of the legal firms that create front companies that invest in assets like real estate and art,” the report noted.
However, “large banks now recognise the issue” and were increasingly willing to cooperate with international financial investigators.
“Eleven leading lenders, including UBS and HSBC, have formed the Wolfsberg Group, an association to develop standards to counter money laundering and terrorist financing,” the NYT said, adding that governments were being urged to provided lists of “politically exposed persons, those potentially subject to corruption because of their jobs.”
The NYT spoke to Finance Minister Ali Hashim, who said that “the banks and other institutions came from abroad, and lowered their standards to the standards that were in the country.”
Foreign bank managers were given free holidays on luxury tourist resorts, Hashim told the NYT, which might have made it “hard for those managers to subsequently turn down risky or inappropriate credit requests.”
Hashim said the government now needed the money to offset a decline in tourism and plug the country’s 34 percent budget deficit.
“What we are asking the World Bank is, help us get this back,” Hashim told the NYT. “Then we won’t need to have that much foreign aid.”