Leaked Cable Reveals Kenya Visa Case

A secret cable published last week by WikiLeaks shows for the first time how decisions to exclude foreign kleptocrats from the United States are made under Presidential Proclamation 7750.

The unredacted cable is from the U.S. Embassy in Kenya to the Secretary of State. It's dated September 16, 2009. Ambassador Michael Ranneberger classified the cable 'secret' and 'sensitive.'

Proclamation 7750 gives the State Department the power to ban from the U.S. foreign leaders and their family and friends involved with corruption or benefiting from it. Deliberations under Proclamation 7750 aren't revealed and U.S. law requires that visa determinations be kept secret. The visa bans apply for life.

The leaked cable began:

Embassy is seeking a security advisory opinion under Section 212(f) of the Immigration and Nationality Act, Proclamation 7750, suspending the entry into the United States of Aaron Gitonga Ringera and members of his family. Ringera was born in Meru, Kenya on June 20, 1950. Post strongly believes Mr. Ringera has engaged in and benefited from public corruption in his capacity as Director/Chief Executive of the Kenya Anti-Corruption Commission (KACC) for the last five years by interference with judicial and other public processes, and that this corruption has had a serious adverse impact on U.S. national interest in the stability of democratic institutions in Kenya, U.S. foreign assistance goals and the international economic activities of U.S. businesses.

In November 2009, we talked about Ambassador Ranneberger. He had made 'a very strange announcement' on his Twitter page, we said, confirming that the U.S. government had denied a visa to Kenya's attorney general Amos Wako. It was the first time an American official had revealed a visa determination under Proclamation 7750.

Justice Ringera, the subject of the leaked cable, became head of Kenya's anti-corruption agency in 1999. He resigned in 2009 when the country's parliament said his re-appointment by the president was illegal. He had been a judge on Kenya's high court and court of appeal.

The leaked cable said:

Justice Aaron Ringera, is at the heart of Kenya's debilitating corruption problem. While it was anticipated that he would be part of the solution when he took office, he has, instead, become an important element in a system of protection for political elites. Post strongly believes that Mr. Ringera has engaged in and benefited from public corruption in his capacity as KACC Director for the past five years by interference in public and judicial processes. The record demonstrates that:

-- the KACC Director is part of the group protecting itself from prosecution for the Anglo-Leasing scandal;

-- he participated in at least one meeting in which the attempted assassination of John Githongo was planned this year;

-- he was aware of threats to Kenyan anti-corruption official John Githongo and shared them with Githongo as an apparent intermediary;

-- Ringera has not successfully investigated for prosecution a single case involving a senior [Government of Kenya] official in five years in a country that is consistently rated as among the most corrupt in the world;

-- Ringera has not acted on recommendations from Parliament or followed through on his own recommendations for prosecution to the President of Kenya;

-- Ringera has stopped pursuing Anglo-Leasing cases, one of Kenya's largest scandals for which no senior level investigations/prosecutions have been concluded;

-- The backdoor manner in which Ringera was reappointed makes clear the premium value placed on him heading the KACC among the political elite.

Ringera was not 'informed of the fact that he may be ineligible for a U.S. visa under section 212(f) of the INA and Proclamation 7750,' the cable said. 

It said his last U.S. visa expired on July 15, 2007. "Mr. Ringera has travelled frequently to the United States," the cable continued. "He is expected shortly to apply for a U.S. visa."

The cable concluded: 'Because of the serious effect of Mr. Aaron Ringera's corruption, Post recommends that Mr. Ringera be excluded for travel to the U.S. under section 212(f) of the INA and that no exception be granted.'

The cable 'SUBJECT: VISAS DONKEY: CORRUPTION 212(F) VISA DENIAL REF: A. 08 STATE 81854' can be viewed here.

Good Intentions, Bad Results

Does foreign aid cause corruption? Yes, mainly by helping corrupt regimes stay in power. And because corrupt regimes are the most unstable, aid also fuels civil unrest.

Here are the top ten U.S. foreign aid recipients as of a couple of years ago, followed by their rank now on the Corruption Perception Index:

1. Israel / 30
2. Egypt / 98
3. Pakistan / 143
4. Jordan / 50
5. Kenya / 154
6. South Africa / 54
7. Mexico / 98
8. Colombia / 78
9. Nigeria / 134
10. Sudan / 172

The top ten donor recipients have an average CPI ranking of about 100 out of 178 ranked countries. But the bottom five of those countries by CPI rank -- Egypt, Pakistan, Kenya, Nigeria, Sudan -- have an average CPI rank of 140. In other words, they're among the most corrupt countries on earth. Not coincidentially, they're also among the most unstable.

Four of those five countries are in Africa. Here's what Dambisa Moyo of the Wall Street Journal said in March 2009 about aid to countries there:

[E]vidence overwhelmingly demonstrates that aid to Africa has made the poor poorer, and the growth slower. The insidious aid culture has left African countries more debt-laden, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher-quality investment. It's increased the risk of civil conflict and unrest (the fact that over 60% of sub-Saharan Africa's population is under the age of 24 with few economic prospects is a cause for worry). Aid is an unmitigated political, economic and humanitarian disaster.

And here's an excerpt (without footnotes) from a prescient U.S. Congressional report from 1999 that explored the link between aid, corruption, and instability:

Research relating to foreign aid shows that such aid is dispersed not on the basis of need, but on the basis of strategic and geo-political considerations. That is, aid tends to support existing recipients who generally are supportive of existing donors. Donors, after all, have incentives to provide aid to those forces, supporters, and organizations that will help them remain in power. In practice, these characteristics are more important to donors than forces of change. A World Bank survey of research on foreign aid, for example, indicates that "there is little relationship between changes in aid and policy reform."

Foreign aid, then, often has not worked to promote reform. Consequently, aid tends to subsidize -- and thereby strengthen -- existing government connections and structures since aid recipients also will distribute this aid so as to preserve their political positions. In short, political elites can benefit from aid. In practice, aid subsidizes and strengthens existing regimes so they become solidified and entrenched. When existing regimes are corrupt, such regimes can be strengthened by foreign aid. It has been shown, for example, that foreign aid seldom includes meaningful incentives to alter governmental behavior with regard to corruption. In sum, when existing regimes are corrupt, the result is that these corrupt political regimes can benefit from foreign aid and become more firmly entrenched.

No one wants to be stingy and hard-hearted toward people anywhere who need help finding food and water, shelter and medicine. But international aid, especially when used to help prop up friendly yet corrupt regimes, isn't part of the solution. It's part of the problem.

Is Africa Rising?

Two reports from Africa caught our eye.

From Kenya, Time's Nick Wadhams reported that politicians there are trying to get rid of Michael Ranneberger, America's ambassador.

One reason they don't like him is because he's frank. In a cable released by WikiLeaks that he wrote in January 2010, he said President Mwai Kibaki and Prime Minister Raila Odinga "benefit from and support impunity and the lack of accountability" and that "no significant steps have been taken against high-level corruption, which remains rampant."

Kenya ranks 154 on the current corruption perception index.

Not everyone in Kenya is unhappy with Ranneberger. The Time story said some members of parliament "think Ranneberger's brash brand of diplomacy is just what the country needs. Martha Karua, a lawmaker and former Justice Minister, was expelled from a recent session of parliament for telling her colleagues that the ambassador's portrait of Kenyan corruption is accurate. 'We must listen to even what we don't like,' she said, going on to describe the parliament as 'the greatest auction house in Africa.'"

Ranneberger, a 20-year Africa hand, also bypasses the government and reaches out directly to ordinary Kenyans. He set up and arranged funding for a big youth empowerment program. That caused the Kenyan parliament to accuse the ambassador of violating the nation's sovereignty and meddling, and to start working on a motion recommending his expulsion.

In late 2009, Ranneberger let slip on his Twitter page that the U.S. government had denied a visa to Kenya's attorney general, Amos Wako. It was the first time an American official had revealed a visa determination under Presidential Proclamation 7750 -- the executive order giving the State Department the power to exclude foreign kleptocrats, their families and friends. By law, all visa decisions are supposed to be secret.

The story in Time said the U.S. government in 2009 sent letters to 15 unnamed  Kenyans to tell them they wouldn't be allowed to travel to the U.S. if they kept blocking reforms. Ranneberger told Time: "The visa bans carry enormous weight. If you tell somebody you're banned from traveling to the United States, that is major."

*     *     *

In the Wall Street Journal online, Samuel Rubenfeld -- who follows corruption stories around the globe -- reported that "Nigeria presidential candidate Nuhu Ribadu, who used to head the country’s anti-corruption agency, called for the resignation of current President Goodluck Jonathan."

Ribadu once headed Nigeria's Economic and Financial Crimes Commission. Under his leadership it secured convictions in over 275 cases. But he fled to London four years ago after a couple of near-miss assassination attempts. He returned to Nigeria after his political ally Goodluck Jonathan became president last February.

Many Kenyans, including Ribadu, had high hopes Jonathan would start cleaning up the country. But a presidential advisory council said last week that Jonathan’s administration is “neck deep” in corruption. Ribadu's campaign team said the report shows the government isn't up to the fight against corruption and that the president is to blame.

A year ago, Ribadu appeared in Washington to speak on behalf of Jonathan's new government. He asked the Senate for America's help in restoring law and order to Nigeria, stepping up the fight against corruption through tougher enforcement of the Foreign Corrupt Practices Act, and ensuring democratic elections in 2011.

A year earlier, Ribadu had visited Capitol Hill as a political exile. In testimony before the House Financial Services Committee, he talked about the human cost of Nigeria's sleaze:

This outflow is not just abstract numbers: it translates to the concrete reality of kids who cannot be put in schools, who will never learn to read, because there are no classrooms; mothers who die in childbirth because the money for maternity care never made it to the hospitals; tens of thousands who die because there are no drugs or vaccines in hospitals; no roads to move produce from farms to markets or enable a thriving economy; no jobs for young school graduates or even ordinary workers; and no security for anyone because the money has been stolen and shipped out.

His empathy and courage have made Ribadu a hero to many Nigerians, especially younger people. Last year they started an online campaign to convince him to run for the presidency.

Bribes That Breach Security

Hologram on a 50-Euro bill.Last week Canadian authorities said they've charged Nazir Karigar, a Canadian citizen, with violating the Corruption of Foreign Public Officials Act. He allegedly bribed an Indian official to win a contract for his company.

According to the Globe, Karigar worked for Cryptometrics of Ottawa. The company develops facial recognition software for airports and governments around the globe and its "engineers are accustomed to dealing with the security industry." 

Is the security aspect of the case important? It could be.

Karigar is the first individual charged under the Corruption of Foreign Public Officials Act. He can't be the first Canadian involved in bribery abroad. Was he charged because his alleged crime compromised airport security in India, a country with security problems that concern the rest of the world?

The White House this year said overseas corruption is "a severe impediment to development and global security." We've reported that Kenyan airport and border security contracts were allegedly tainted by corruption. That led the U.S. to bar entry of some Kenyan officials and the U.K. did likewise. (President Obama went to Kenya in 2006 and talked about the sleaze there.)

The Australian federal police are investigating Securency, the polymer banknote-maker half owned by the Reserve Bank of Australia. The case has security implications. There have been persistent rumors that Securency paid bribes and offered favors to win currency-printing contracts in Asia, Africa and Latin America. The integrity of any country's printed money supply is a global concern.

An older U.S. case with security-related loose ends involves American Bank Note Holographics. It prints currencies, travelers and other checks, and produces credit cards and holograms for use on security-sensitive surfaces. In July 2001, Joshua Cantor, the company's president, pleaded guilty to a four-count federal criminal information. It charged him with conspiracy to defraud the U.S., a books-and-records violation, making false statements to auditors, and conspiracy to violate the FCPA. The charges arose from bribes paid on behalf of American Bank Note in Saudi Arabia. Then in August 2003, Morris Weissman, the former CEO and chairman of the company, was convicted of fraud after a long trial in Manhattan.

Neither Cantor nor Weissman have been sentenced yet, despite a nine-year-old guilty plea and a seven-year-old jury-trial conviction. Is it because of their knowledge of the security-related industry? Have they been helping American and other authorities track down corruption that might make borders leaky and put currencies at risk?

There may not be any visible links among Cantor and Weissman, Securency, Kenyan graft, and Nazir Karigar. But there's a common thread of global security running through them.

Alcatel-Lucent Headed For Settlement

According to its latest consolidated financial statements, Alcatel-Lucent has reached agreement in principle with the Justice Department and the Securities and Exchange Commission to settle Foreign Corrupt Practices Act offenses related to Costa Rica, Taiwan and Kenya. If the settlement goes ahead, the company will pay a $92 million criminal fine (payable over three years) and a $45.4 million in disgorgement to the SEC.

The settlement with the DOJ would be structured similar to Siemens', with the company entering into a three-year deferred prosecution agreement for accounting and internal controls offenses, while three subsidiaries — Alcatel-Lucent France, Alcatel-Lucent Trade and Alcatel Centroamerica — would each plead guilty to violating the FCPA’s antibribery, books and records and internal controls provisions. The DOJ agreement would require appointment of a French compliance monitor (in Siemens' case, the monitor was German).

The Paris-based telecommunications company was formed with the 2006 merger of French-firm Alcatel and the American company Lucent Technologies Inc. Before the merger, Alcatel had American depositary receipts traded on the New York Stock Exchange and Lucent was also listed on the NYSE. The merged company's shares trade on the NYSE under the symbol ALU.

We've written about both companies before.

In September 2008, former Alcatel executive Christian Sapsizian, 62, was sentenced to 30 months in prison, three years of supervised release, and forfeiture of $261,500 for bribing employees of the state-owned telecommunications authority in Costa Rica. He had pleaded guilty in June 2007 to two counts of violating the Foreign Corrupt Practices Act.

Sapsizian, a French citizen, was a 20-year Alcatel employee and served as the company's deputy vice president for Latin America. In August 2001, Alcatel received a $149 million cellular network contract from Costa Rica's El Instituto Costarricense de Electricidad (ICE). Sapsizian had promised to pay an ICE board member and other officials up to 2 percent of the value of the contract. Before being fired in 2004, he caused Alcatel to wire $14 million in “commission” payments to a consultant, who then transferred $2.5 million to the ICE official.

Sapsizian admitted to conspiring with Edgar Valverde Acosta, a citizen of Costa Rica who was Alcatel’s senior country officer there, to arrange the bribes. Acosta was indicted with Sapsizian on June 14, 2007. He's an FCPA fugitive, last known address: Costa Rica.

The U.S. indictments of Sapsizian and Acosta resulted from bribery investigations by Costa Rican authorities. In October 2004, Alcatel learned of the investigations. It fired Sapsizian and Acosta and disclosed to U.S. authorities that it had uncovered payments from employees and consultants to government officials, ICE employees, and political parties.

Lucent, meanwhile, settled Foreign Corrupt Practices Act charges in December 2007 with the DOJ and SEC. Its violations occurred before the merger with Alcatel. The settlement included a $1 million criminal fine and $1.5 million in civil penalties. Lucent's offenses involved payment of travel expenses for Chinese government officials from 2000 to 2003. The FCPA includes an affirmative defense that allows payment or reimbursement of expenses of foreign officials that are directly related to “the promotion, demonstration, or explanation of products or services." 15 U.S.C. §§ 78dd-1(c)(2)(A) and 78dd-2(c)(2)(A). Many of Lucent's payments, however, were not directly related to legitimate business purposes and were not recorded accurately in its books and records.

In April 2009, Alcatel-Lucent signed agreements in Washington, D.C. worth $1.7 billion with China Mobile and China Telecom to help the Chinese companies roll out 3G technology.

Here's part of the company's disclosure from its latest Form 10-K:

As previously disclosed in its public filings, Alcatel-Lucent has engaged in settlement discussions with the DOJ and the SEC with regard to the ongoing FCPA investigations. These discussions have resulted in December 2009 in agreements in principle with the staffs of each of the agencies. There can be no assurances, however, that final agreements will be reached with the agencies or accepted in court. If finalized, the agreements would relate to alleged violations of the FCPA involving several countries, including Costa Rica, Taiwan, and Kenya.

Under the agreement in principle with the SEC, Alcatel-Lucent would enter into a consent decree under which Alcatel-Lucent would neither admit nor deny violations of the antibribery, internal controls and books and records provisions of the FCPA and would be enjoined from future violations of U.S. securities laws, pay U.S. $45.4 million in disgorgement of profits and prejudgment interest and agree to a three-year French anticorruption compliance monitor to evaluate in accordance with the provisions of the consent decree (unless any specific provision therein is expressly determined by the French Ministry of Justice to violate French law) the effectiveness of Alcatel-Lucent's internal controls, record-keeping and financial reporting policies and procedures. Under the agreement in principle with the DOJ, Alcatel-Lucent would enter into a three-year deferred prosecution agreement (DPA), charging Alcatel-Lucent with violations of the internal controls and books and records provisions of the FCPA, and Alcatel-Lucent would pay a total criminal fine of U.S. $ 92 million—payable in four installments over the course of three years.

In addition, three Alcatel-Lucent subsidiaries—Alcatel-Lucent France, Alcatel-Lucent Trade and Alcatel Centroamerica—would each plead guilty to violations of the FCPA’s antibribery, books and records and internal accounting controls provisions. The agreement with the DOJ would also contain provisions relating to a three-year French anticorruption compliance monitor. If Alcatel-Lucent fully complies with the terms of the DPA, the DOJ would dismiss the charges upon conclusion of the three-year term.