Malawi’s Asset Declaration: A study in how to sustain presidential larceny and a license to loot

Abstract:

An effective income and asset declaration regime can help prevent abuse of power, reduce corruption and increase public accountability, public trust in institutions and government legitimacy.

Research findings indicate that in countries where wealth disclosure is combined with content verification and public access to declarations are significantly associated with lower perceived levels of corruption.

In Africa, the scope, coverage and level of enforcement of asset declaration laws vary from country to country, according to the local context, political situation and capacity to manage such schemes.

In Malawi, a weak income and asset declaration regime is largely responsible for the billions late President Bingu wa Mutharika is reported to have amassed and stashed abroad. This is because the asset disclosure programme and regime in Malawi does not provide for

1. content verification and
2. public access to declarations;

which would enable the general public and the media to independently review the completeness of the assets so declared and more importantly gauge the reasonableness of wealth the president and cabinet ministers accumulate while in office.

To put it in brief, the whole law on Assets Declaration is not worth the paper that it is written on, and further the ritual secrecy that surrounds the declared assets completely wipes out benefits that Malawi should have been reaping from the Law on Assets Declaration.

In this write up, which has benefitted from U4 publication on the same,  at my request, the inimitable Garvey Karvei Esq. zeroes in on the regime of assets declaration, as it currently is in Malawi, in the context of the global and African perspective and argues that only irredeemable thieves and crooks should fear public disclosure.

– Wise One from the East

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Main Article Structure:

• Part 1: The Crux of Asset Declaration
• Part 2: Asset Declarations – Africa and Malawi
• Part 3: Malawi’s Catch 22
• Part 4: Conclusion, when and whence cometh a Solomon?

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Part 1: The Crux of Asset Declaration

Many countries have laws and rules which require public officials to declare their wealth and assets either upon entry into the public service or promotion into a position with potential for illicit enrichment.

These laws and rules serve two purposes:

1. a preventive function: helping anticipate potential conflicts of interest before actual misconduct occurs.
2. an investigative function: providing valuable information that may help uncover and evaluate misconduct and illicit enrichment after it takes place.

Asset declaration provides the baseline against which later disclosure can be compared to identify which wealth is not attributable to legitimately earned income, gifts and loans, and warn against illicit enrichment from sources such as bribery, fraud and corruption.

In doing so, compulsory periodic disclosure of assets and liabilities by public officials works as an effective measure to prevent corruption, demonstrate the leadership’s commitment to fight corruption and helps the public to hold the government accountable.

Although asset declaration laws may help detect illicit enrichment and prevent corruption, their primary purpose is not and should not be punitive.

They can potentially enhance public confidence in the government by demonstrating that most public officials live within their means. Again, honest public officials’ reputation can also be protected from undue suspicion, allegations of malfeasance and dicey journalism.

Asset Declaration Laws: far from magic wands

While asset declaration schemes have great potential for stemming abuses of power and looting of public resources, their impact can be hampered by:

• shortcomings of the regulatory framework;
• lack of political will;
• weak and complicit opposition, media and civil society, and
• crooked leaders determined to loot – billions – at any cost while their people languish in abject poverty.

Major flaws in legislation that militate against the effectiveness of asset disclosure as a tool against corruption include:

• The lack of clarity about what assets, liabilities and interests public officials are to disclose;
• The absence of a legal requirement for the verification of asset declarations;
• The lack of effective sanctions and clarity over the prosecution of offences;
• The lack of public (and media) access to officials’ asset declarations.

The effectiveness of the asset disclosure regime may be further affected by lack of resources (manpower, technical and financial) allocated to implement the scheme, especially with regard to the verification of submitted declarations.

The Impact of Officials’ Asset Declaration Laws:

The Transparency International Global Corruption Report 2006 presents findings of a comparative analysis of asset disclosure laws in 16 countries, to establish how effective officials’ asset declaration laws are in reducing corruption.

After a series of statistical tests were performed to measure the association between the existence and scope of such laws in these countries and their perceived levels of corruption; the findings established that:

• Countries with a longer tradition of asset declaration by public officials had significantly lower perceived levels of corruption than countries with newer laws.
• There was no significant correlation between the perceived levels of corruption and which level of officials must declare their assets. Levels of corruption in countries requiring asset declaration for all public officials were not perceived significantly lower than in other countries, where only higher ranking officials must declare their assets.
• Perceived levels of corruption were lower in countries whose declaration laws permitted prosecution of the offending officials.
• Countries that verified officials’ statements had significantly lower perceived levels of corruption than countries that do not verify declaration content.
• Countries that gave public access to officials’ asset declaration had significantly lower perceived levels of corruption than other countries.

The analysis further demonstrated that the combination of content verification and public access to declarations demonstrated an even greater association of reduced corruption.

These findings, corroborated by the findings of an expanded dataset of 42 countries, suggest that asset declaration laws have important potential in the fight against corruption, provided they are designed in an effective and credible manner.

 

Part 2: Asset Declarations – World, Africa and Malawi

A 2006 survey of 148 countries eligible to receive World Bank support found that, in Africa, 28 countries required disclosure of income and assets by public officials.  Of these 28 countries,

• 23 required officials to declare assets to an anti-corruption body or other government entity, and that
• only 5 (Cape Verde, Republic of Central Africa, Liberia, Sao Tome and Principe and South Africa) went further requesting publication of the declarations.

In addition to the above-mentioned survey, the World Bank compiled asset disclosure laws from 18 countries that illustrated the different aspects of various disclosure regimes, including in Ghana, Kenya, Nigeria, Tanzania and Uganda.

The World Bank study argues that no best practice can be identified for such laws, as they are and should by all means be tailored to a country’s specific circumstances, depending on social, historical and political factors, as well as resources for enforcing the law.

Nevertheless, a few principles emerge with credible asset disclosure regimes sharing some elements.

Best practice requires that Asset Declaration regimes should unambiguously establish:

1. Who should declare what to whom,
2. The filing frequency and methods,
3. The declaration processing,
4. Applicable sanctions for intentional failure to declare and
5. Public access to and scrutiny of these declarations.

While all the above are critical, this article mainly focuses on Public Access to and Scrutiny of Income and Assets Declarations.

Global Perspective vs. Bingu’s Billions

Experience around the world suggests that allowing public access to officials’ declarations greatly enhances the impact and value of asset declaration schemes.

Usually, enforcement agencies have access to the data, but the credibility of the process is undermined if it is not made accessible to the general public. In Malawi, for instance, the Speaker of Parliament is the watch dog of the repository of asset declaration.

The president prepares or compiles his or her list and files it with the Speaker of Parliament, who locks it in some safe, never to be seen by anyone.

Well, shit happens. A president dies and then and only when he is six feet deep, do citizens learn that he has stashed away billions and billions all over the globe; amounts quiet difficult to reconcile to official earnings, his initial declaration and humble beginnings.

Paradoxically, it transpires that he has been accumulating these billions in a period when his country was facing economic challenges unheard of in living memory: namely forex shortages, long fuel queues – with people sleeping at service stations to get rationed fuel, etc.

Hands off the dead, they cannot defend themselves!

Making disclosure public would have allowed investigative journalists, media, scholars and civil society groups to play a role in monitoring the accuracy of the presidential declaration and documented assets (farms, head of cattle, goats, chickens, apartments, cars, bicycles etc) when he was alive.

It would have accorded them grounds on which to question the billions and more importantly, repeat that more importantly; it would have protected the late president’s legacy by enabling him to explain the wealth – assuming there is a sensible explanation.

Moving forward, if Malawi goes public with Asset Declarations, she will not be the lone ranger in Africa.

Other African countries requiring public declaration for some or all their top officials include South Africa, Liberia, Cape Verde, Sao Tome and Principe and the Central African Republic.

These declarations can be made readily available to the public in a variety of ways, e.g.:

• through the media, or
• the official gazettes, or
• simply registers open to public scrutiny.

Disclosure through Internet databases is these days also an option and has been implemented successfully in Liberia during the elections in October 2004.

Although it does not explicitly collect information resulting from asset and wealth disclosures, neighbouring Tanzania’s Notice Board (TGN) is another example of how an IT platform can potentially be used to strengthen accountability and transparency, by making key statistics and governance indicators accessible to the public.

Invasion of Privacy?

While this is a very valid point, countries have designed hybrid schemes that balance public disclosure with the need to protect public officials from privacy invasions. And while on this point, why would anyone who wants “privacy” venture into public office is not to steal?

To strike a balance in South Africa, declarations are kept in a register that has a confidential and a public part with the confidential information including liabilities and interests of spouse, permanent companion and children.

Similarly, in Niger, the Executive Ethics Code of 2000 states that the register must have a confidential and public part. Any person may access the public part of the register during office hours.

In Uganda, income and asset declarations by public officials are treated as public information and the authorities in the past published some declarations in the newspapers.

Countries such as Kenya, Nigeria, Zimbabwe, Gabon, Malawi and Senegal that do not provide for public disclosure of income and asset declarations defeat the whole purpose of declaring assets and no wonder they are always at the wrong end of any survey on corruption.

Part 3: Malawi’s Catch 22

Malawians Achilles Heel vis-à-vis the evil called corruption is the citizens’ unfailing ability to elect and trust a succession of unscrupulous and corrupt leaders, devoid of genuine love for their people.

Fact is: in Malawi, the president more or less holds all the aces. Therefore, with a well-meaning president, introducing and enforcing a vibrant Declaration of Assets regime should not be too big a problem, if the president wanted to leave a shining legacy.

Even if obtaining political support and consensus for the initiative were to prove a challenge; political will and consensus for reform can be achieved through an enabling event that would trigger demand for change, or can be developed over time or even sheer pressure from citizens could help such a president on this noble mission.

The best case authority for success in promoting voluntary compliance schemes happened in South Korea.

In 1993, President Kim Young Sam publicly disclosed his wealth and called on ministers and other high level officials to do the same.

More than 300 officials complied, and later the same year, the country adopted mandatory disclosure requirements for public officials. But can a Malawian president do this? No.

Or more poignantly, do our presidents know of Korea at all? Yes – the typical and current Malawian president visited Korea. She was awarded a degree. And yes, her government machinery concocted all sorts of falsehoods on a non-existent youth export scams; without learning from Korea anything that can really help to develop Malawi.

Here we are Ladies and Gentleman with the classic: you can lead a horse to water, but you can’t make it drink – the sad story of Malawi’s leaders.

An opportunity lost:

Despite all this or in spite of all this, I submit without fear of contradiction that lack of public Assets Disclosure is an opportunity lost.

Another fact is: not all public servants are corrupt, and asset disclosure could protect the guiltless public officials from suspicions, allegations and reputational damages.

Again, full disclosure could boost citizens’ confidence in public institutions and public servants and the Malawi leader who made this dream a reality would not need to campaign for a second term.

The question of resources:

When Malawi leaders want to dodge an issue, lack of resources is the favourite scape-goat. They can find resources for a host of idiotic schemes and scams, but not for the things that can make Malawi turn around irreversibly.

Therefore let us critically review “lack of resources”.

In addition to the necessary legal mandate and authority, the public asset declaration monitoring mechanism would need adequate resources and capacity to properly administer the scheme, and to verify and confirm the authenticity of assets and liabilities declared by public officials.

To address challenges relating to capacity, some measures can be easily implemented at a low cost and with no cost at all.

The first step would be to reduce the initial number of persons subject to public wealth declaration to a manageable level.  This would reduce costs.

Secondly, expanding and clarifying declaration requirements, plus training of public officials to improve the quality of wealth declarations – would decrease the number of queries and consequently, reduce costs.

Thirdly, developing a uniform system to store and analyse the details of wealth declarations and creating a single body to handle the review, inspection and verification of wealth declarations would streamline things so as to avoid costs associated with bureaucracy.

And here comes the killer: giving the press and the public access to asset declaration data would mean that the press would, for free, act as “auditors”, scrutinizing the assets and the wealth being accumulated with the declared assets as a baseline. Does this common sense require Albert Einstein’s intervention?

Part 4: Conclusion, when and whence cometh a Solomon?

Malawi and more so her devious leaders stand to gain more from promptly declaring and publicly disclosing assets.

In the hope that one day Malawians will elect a transformational leader, a person of rare integrity, and truly committed to walking the talk on fighting corruption; I will offer a blue print on where to start.

Step 1: Start slowly and build up capacity. Any government risks losing credibility if it fails to implement asset declaration in a timely and credible manner due to lack of capacity or over ambitious plans.

Step 2: Failure may also be interpreted as a lack of commitment to reform. Hence, it is realistic that the president him/herself takes the first step as a pilot, by publicly declaring his/her wealth and progressively extending this to other public office holders.

Step 3: Targeted public officials must have the capacity to comply with new and existing regulations. This can be achieved through the development and provision of appropriate training.

Step 4: Simplifying the reporting process as much as possible would also be essential. Simple procedures are more likely to be understood and complied with. To achieve this, standardisation of reporting forms and formalised reporting procedures would do the trick. The reporting burden can further be reduced by providing the option of filling out and transmitting forms electronically.

And most importantly, engaging and building the capacity of civil society organisations, media, journalists, etc, to promote effective monitoring and oversight of the declaration scheme would ensure that the general public’s confidence in the system and the leadership increases – at little or no cost to government.

At the end of the day, full Asset Declaration and Disclosure is a win – win solution with the only losers being inveterate thieves and crooks.

A global context with references is, thanks to U4, freely available here:  http://www.u4.no/publications/african-experience-of-asset-declarations/

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