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Jose UGAZ: “It is really dangerous for democracy if people feel frustrated because there’s no real change”

In an interview with The Day, the chairman of Transparency International revealed his advice to Petro Poroshenko and told our reporter how he had got David Cameron interested at the London summit
08 June, 17:57

The former Ad-Hoc Attorney of Peru who got a corrupt president imprisoned has arrived in Ukraine. Jose Ugaz is now serving as the chairman of the world’s most authoritative anti-corruption network, Transparency International. And, as Den reported on June 7, over this time, he held a series of meetings to promote effective fight against corruption which saw him talking to various people, including members of NGOs, university community, journalists, and government figures...

Ugaz already met with Petro Poroshenko. At the meeting, the government side included, besides the president, Prosecutor General Yurii Lutsenko, deputy head of the Presidential Administration (PA) Dmytro Shymkiv, and Foreign Minister Pavlo Klimkin. Although the media and the PA’s press office reported that the meeting dealt with recovering the money stolen by Viktor Yanukovych, we know that the world-famous Peruvian’s message to the president of Ukraine was not limited to it. What advice did Ugaz bring to Poroshenko and why he considers that Ukraine should try not only Yanukovych, but Leonid Kuchma as well – you can read it in an exclusive interview for The Day.

 It is, if I am not mistaken, your first visit to Ukraine. Why did you choose this time to come? Have you come here at the invitation of some Ukrainian figure, maybe? Who might it be?

“Yes, it is my first visit. I’m the chair of Transparency International, which is the largest coalition of anti-corruption and promotion of integrity in the world. We are present in 114 countries that have national chapters, and we have a chapter here, in Ukraine.

“To come here was our initiative. We came now because for Ukraine it’s a very relevant moment, after two years of President Poroshenko, and many promises regarding specifically anti-corruption reforms, and several new laws have been approved, I perceive there is a lack of enforcement. And people here are disappointed with this gap between his promises and what really has been enforced.

“And since new bodies have been created, like the Investigative Bureau for Corruption Cases and the Preventive Agency for Corruption, we think it’s a good opportunity to let the authorities from the civil society side know that there is an expectation of citizens that real change comes to anti-corruption efforts.

“We are seeing what’s happening around the world, you see that president and vice president of Guatemala are imprisoned because of corruption, Dilma Rousseff has been suspended because of corruption, in Honduras people are on the streets because of corruption, and here, in this country, two years ago, three years ago, there was a massive presence and reaction of the citizens because of these issues.

“I think it is really dangerous for democracy and governments if people feel frustrated because there’s no real change.”

When president Poroshenko presented the first post-Euromaidan prosecutor general, he quoted Lee Kuan Yew: “One should jail three friends of his” [to combat corruption. – Ed.]. Two years later, his friends are not behind bars, but rather in the parliament, government, etc. We know that you will meet with Poroshenko as part of your visit. What advice will you give him?

“Well, my intention, first of all, is to express our concern to the president regarding what we envisage may happen here, since it is happening in other countries of the world. And I think it would be good for him to be aware of the consequences of not addressing corruption properly. That would be the first thing I would like to tell him.

“And we will express our concerns I just mentioned of the need of enforcement of some of the interesting new laws and institutions that have been created during his regime but are not really functioning.”

Has the president or his administration, or perhaps the representatives of the Prosecutor General’s Office, offered you to become their consultant in the fight against corruption and money laundering?

“Personally not, but our chapter has been quite involved in these efforts. The chair of our chapter here in Ukraine is part of the panel that is in charge of selecting the members of the preventive agency. We are also quite involved in the ‘ProZorro’ proposal for public procurement. We have also rendered our opinion on some of the laws that have been already passed. So, I think that TI Ukraine has had a very active role in this process. So, we have also responsibility for that reason to monitor the implementation of these proposals in order to support the people.”

In Ukraine, you are known as a person who jailed the president who had appointed you... Ukrainians would like our law-enforcement officers to act in a similar manner. Perhaps it is not so much about jailing someone, but rather about them being very strict with their political patrons...

“It’s similar, but it’s different, because in Peru we have former president Fujimori in prison and convicted to 25 years. In Ukraine, you do not have Yanukovych here. Everybody knows he is in Russia, and apparently, efforts to bring him home, prosecute him and convict him and recover the assets that he has stolen – that amount to a huge figure of money, people say it is 12 billion dollars – it has not happened.

“In Peru, after more than 16 years as we started that anti-corruption process, the results are there. I mean, all the heads of the criminal organizations are in prison – Montesinos was convicted to 25 years, Fujimori was convicted to 25 years, the former attorney general was convicted to 10 years.”

What was the most difficult part of your job?

“Peru was in a state of collapse, so working with institutions that were quite affected because of what Fujimori and Montesinos had done was quite difficult. But the transitional government was very wise and there was a real political will, it gave us the necessary framework to do it. So, the judiciary decided to appoint six anti-corruption judges – young judges, not tainted with corruption. The new attorney general did the same, and when we went to congress and we presented our proposals in order to approve some key laws in order to be able to prosecute these people, because our criminal procedure code was from 1914, and our criminal code was from 1934, so those were legal instruments that were not designed to confront modern organized crime. So, when congress admitted our proposal, and then we had this specialized subsystem with judges and prosecutors – young, ‘clean’ judges and prosecutors with institutional will to take this forward – I think, that we will overturn, overcome, make progress on all that institutional weakness.”

You have mentioned president Yanukovych, who has not been punished for corruption and human rights violations, because he has fled the country and is hiding in Russia. But there is another Ukrainian president whose misdeeds astounded the whole world, I mean Kuchma. The “Ukraine without Kuchma” protest campaign warmed up the country for the first Maidan. The slogan of the Orange Revolution “Get bandits behind the bars!” did not emerge by accident, after all. He was the architect of what is called the clan-oligarchic system in Ukraine: a London court heard testimony of a Ukrainian oligarch who told it how the privatization of state property took place during the presidency of Kuchma... This president has stayed here. He goes abroad to represent this country at vitally important talks, gives advice on how to change the Constitution... How do you think, should we return to his case and deal with what happened in the country during his presidency and punish the culprit? Or would it be better to turn this page?

“No page should be turned. Corruption needs to be remembered, corruption needs to be investigated, and all the relevant cases of corruption need to be sanctioned.

Sketch by Anatolii KAZANSKY from The Day’s archives, 1997

“That’s why we in Transparency International are campaigning against impunity, because impunity is the other side of the coin of corruption. If people see that the corrupt go away without paying the legal consequences of their acts, then this will affect the entire society. So we need to break impunity, and those who incur corrupt practices must bear the consequences, meaning they should be investigated, tried, convicted and return the assets they have taken abroad. So, in the specific question of this former president, I think he, as Yanukovych, of course, should be investigated and sanctioned.”

And here we need your experience on how to resist political dependence. You went against the system that put you in office. How did you do it? Kuchma said once in a conversation with the US ambassador to Ukraine: “All you need to know about Ukraine is that all politicians here are my pupils.”

“Yes. I was appointed by Fujimori…”

So that you destroy his opponent...

“No. In the Peruvian case, there was a crisis when a video appeared where Montesinos was bribing some congressmen of the opposition. So, this crisis led to the run of Montesinos away from Peru, and Fujimori – to save his face, because he was working with Montesinos – he decided (because of the social pressure, there was a social unrest when that video appeared) to appoint me in order to investigate Montesinos, not his opponents. Montesinos was part of his team, he was his personal adviser.

“But after a week, when we started investigating Montesinos, we investigated information that Fujimori had received apparently money from the drug traffic, Colombian drug traffic.”

You understood that when Alberto Fujimori was appointing you, he had no desire to see you getting involved with these things... How is one to remain independent if one has been appointed by a president or an influential politician? What, or who provided support to you? How did you manage to turn the situation to your advantage and launch an earnest investigation of those who had enormous influence on you?

“First of all it’s important for you to understand my role. I was not a prosecutor, I was not a judge, I was a state attorney. I don’t know if you have that figure here. So I had very little power. Actually, I had no power. The power is on the prosecutors and on the judges. My position was to be the attorney of the state, to defend the state of the crimes that have been committed by these people.

“I’m not a public official. We came from the private sector. Our law allows in some complex cases to bring someone from the private sector ad hoc – that was my situation. Then I had a capacity with my team – because I had no ties to the government really – to push, to put pressure on the prosecutors and the judges to move on the investigations.

“This is clear what I have to say: that if you are appointed it doesn’t matter who appoints you. The issue is that you have to play a role, an independent role, and your commitment is with your country, not the person who appoints you. Then I didn’t care whether it was Fujimori who appointed me or not. My mission was to defend the interest of my country and not the interest of Fujimori.

“As a matter of fact, when I was going to start the investigation against Fujimori, I was called by the Ministry of Justice, and I taped that conversation. And the minister of justice said that Fujimori was really upset with me, and that he was requesting my resignation. And I said – okay, I will resign immediately, but I will not accept Fujimori giving me instructions of what I want to do. And the Minister said ‘No, no, no, I have said the president that if you resign I will go.’ And of course at that moment the crisis was of such magnitude that the president couldn’t lose a minister of justice.


“But he said to me: ‘Look, what you are doing is not correct, because the president is your client. He’s the one who hired you; he retained you to defend him.’ And I said: ‘No, the President is not my client; my client is the country whoever is the president. And that was the real motivation that took us to… after a week and a half I was appointed by Fujimori, we opened an investigation against him for drug trafficking and money laundering. And three days after that he left the country.”

The organization you represent measures the Corruption Perceptions Index worldwide annually. I am interested in your assessment of the global dynamics in this field. Is the world attaining a better shape as it fights corruption, or is it, on the contrary, getting worse?

“If you look at the 2015 CPI we have released a month ago. Now we have it color-coded – where red and very red is a lot of corruption, and light yellow and yellow is less corruption. More than two thirds of the world is red and very red. So, we’re having a considerable amount of corruption all over the world. And not only corruption, we have what we now call in Transparency International ‘grand corruption.’ When we talk about ‘grand corruption’ we are talking about cases like Yanukovych. That means people with power, economic or political power, that are mobilizing huge amounts of assets, twelve billion dollars in this case, and because of their actions they are having a serious impact in human rights. Because the money they take of course imply denial of work, education, health. Corruption kills people.

“When we talk about grand corruption now, you see the scandals of the world, most of them are grand corruption: the Obiang family in Equatorial Guinea, Martinelli in Panama, Yanukovych here, the Prime Minister of Malaysia, the Chinese members of parliament that have taken more than 60 billion dollars out of China, the former Prime Minister of China with an account in The Bahamas for more than 2.5 billion dollars. All these banks – HSBC, PNB, Commerce Bank, Citibank – are laundering money for billions of dollars, all of them have been fined with billions of dollars, because they have been caught in cases of ‘grand corruption.’

“So the question is: do we have more corruption than we had in the past? Probably yes, because there’s more money in the world. But also, not necessarily we have more corruption, but what I consider that corruption is more visible now. Because we are living in a global world, because we have very investigative journalists, because the exposure of corruption that organizations like ours are making didn’t exist 15 or 20 years ago.

“So, probably, it’s a combination of both. Corruption has increased, but also it’s more exposed because citizens are organized, civil society and journalists are exposing it. Look what happened with Panama Papers, I mean it’s a huge leak of 11.5 million documents exposing many cases of corruption, and of course it will make a difference in the future.”

I had an interview with the president of Moneyval last week, it is the Council of Europe’s committee on combating money laundering and terrorist financing. I raised the issue of the so-called first world nations’ interest (or lack thereof) in ending corruption in developing countries, in particular Ukraine. I got the impression that the powers that be are not interested (economically) in stopping corrupt rulers from plundering countries such as Ukraine. After all, the stolen money then flows to developed economies and stays there. They buy properties, businesses, luxury yachts... And my interlocutor confirmed my “hypothesis,” saying that the Liechtenstein law, for example, provided for no stern punishment for a person who used their banking system for money laundering. You have a huge impact on the global community. How to raise this issue to make the world stifle corruption? I know you have urged the governments to eliminate offshore jurisdictions. Have you got any response?

“I came here from the London Summit that took place in the UK three weeks ago. And Prime Minister Cameron made a comment to the Queen regarding the visit of the presidents of Nigeria and Afghanistan, saying that they are presidents of countries with fantastic corruption. I had a panel a day after and said to Prime Minister Cameron that you need two to tango. When we say ‘you need two to tango’ regarding corruption we mean that money is taken from our countries because of corrupt public officials, but as you say very well this dirty money, corrupt money is taken to the first world: to the United States, to London, to the Faroe Islands, to Spain, to Switzerland, to Lichtenstein, wherever.

“And these countries are co-responsible of these practices of corruption. So, I think Prime Minister Cameron understood the message. At the end of the summit he made a reference to it, saying that it was time also for the first world to stop that corruption.

“Our Chapter in the UK made a very interesting research last year, and it shows that a significant amount of the property of London and other major cities of the UK is owned in the name of offshores. Why? Because they are hiding the identity of corrupt owners.

“The New York Times revealed that a significant amount of the property of Manhattan, in the most expensive avenues of Manhattan, is owned under the name of offshores that are hiding oligarchs and corrupt PEPs [politically exposed persons] that have been buying this type of property.

“So we are very clear that this is not a problem of the third world, this is not a problem of developing countries, this is not a problem of the South. This is a problem that involves both parties – those who are victims, like our countries (I’m Peruvian), and those who receive the money and allow the corrupt to enjoy that money on their markets, or gave them the facilities to move the money to their offshore territories like the islands that are related to the UK.

“The interesting thing of the London Summit is that upon a request of Cameron, the prime ministers of these offshore territories have allowed to give the UK – not to make it public but at least give to the UK the information of the beneficial owners of offshores in order to conduct investigations. That’s a step forward. That’s not the ideal, we are requesting an open global registry so anyone can know who is the ultimate beneficial owner of an offshore. And we have taken that proposal to the G20, and the G20 has accepted our initiative, so we will see how this will work. Right now, the UK, Denmark, Norway, and the Netherlands have already started working on these registries, and at the London Summit 12 additional countries have signed for this. So, we expect that in the near future this is going to start changing the scenario regarding offshore companies.”

You probably know that Ukraine is in a state of war. We were attacked by a neighbor. Experts call Vladimir Putin’s regime one of the most corrupt in the world. How can we use this fact as a weapon in the fight against the aggression launched by that regime?

“Well, that’s what we are trying to do. We certainly believe that there’s something we have to do. It’s our obligation as a civil society organization. Our Chapter in Russia is very active, exposing and pursuing the corrupt even abroad Russia.

“My personal belief is that Putin’s regime is highly connected with oligarchs and several businesses that are not proper for an authority like him. Everybody knows that Yanukovych is in Russian territory and this would not have happened without the acceptance at the highest level of power in that country. So, I don’t have the evidence, but it wouldn’t surprise me if part of the funds with which this conflict in Ukraine is financed comes from corrupt sources.

“Of course, we need to investigate it, we need to expose it, we need to denounce it, and the world needs to know what’s happening there.”

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