RENATA: Welcome to the Financial Crime Conversation podcast from Refinitiv definitive and classic business, where we explore the human cost of financial crime. We take a look at the impact the financial crime has on individuals and society through the lens of our guests who have experienced, have insider knowledge of it and are willing to share their story with us.
I am Renata Galvao, manager of content specialist at Refinitiv as a victim of identity theft in my childhood. I can personally say that financial crime is not a victimless crime. South Sudan has been struggling with the violent civil war since December 2013.
The armed conflict resulted in the deaths of nearly 400,000 people and left over 2 million people displaced. Although political struggle and division are usually appointed as the root causes that led to the eruption of such violence, there is one factor should not be ignore the profitability of war.
I am talking with Brian Adeba. He's a South Sudanese journalist and policy lead on South Sudan at The Sentry, an organization that tracks corruption and human rights violations. So Brian, you have been investigating and reporting on the South Sudan conflict for a while now?
Maybe you can give us your overall perspective about what happened and is currently happening politically in South Sudan to start off our conversation
BRIAN: Thank you so much for the opportunity. South Sudan is currently recovering from a very devastating war that started in 2013.
There is a tenuous peace agreement that has been signed between the government and the main rebel group that was fighting the government in 2013. A government of national unity has been formed. This government is supposed to be transitional, and the end of its tenure is supposed to lead to elections.
The government is also the transitional government is tasked with massive reforms that are geared, all designed to prevent the country from returning to wall again. Among these reforms are institutional reforms. South Sudan is what we call a kleptocracy, where institutions of government institutions that are supposed to offer oversight for government activity have totally been hijacked and work at the behest of top government officials. And these in the past enable egregious corruption to prevail. So, and that kind of corruption was in the South Sudanese sense, really very competitive among the elites in the system, and it was instrumental in plunging the country to war in 2013.
So, the African Union, under the under the direction of a regional organization called Égard, sought to prevent the country from returning to conflict again and identified. But to do that, you need to reform the institutions of governance in the country so that the corruption that prevailed in 2013 could be prevented and first also prevent a return to conflict. So that's where we are right now in South Sudan. The peace agreement has gotten off on a slow start. The implementation has been marked by significant delays. Key tenets of the peace agreement itself have not been implemented on time and are still not implemented as we speak.
Notably, the reform of the security sector, which is what in the agreement is called security arrangements. This is basically a process that would bring rebel fighters and government troops together, train them as part of a national army and then proceed from there.
And that part of the agreement remains problematic as we speak. Other tenants of the agreement, like the swearing in swearing in of the National Assembly, has taken more than two years to be completed. So [yesterday], actually the parliament was sworn in.
But even as we speak right now, the agreement still faces a lot of challenges due to its slow implementation and also the fact that there are other groups that are not signatory to the agreement. They are outside the agreement and they're still fighting the government.
RENATA: I was reading about the conflict before our conversation, of course, and most of what I read mentioned as the root cause of the conflict. The political struggle, the government opposition, and of course, that plays a big role, but you've just mentioned another important cause that perhaps is sometimes overlooked, which is corruption and how profitable certain political scenarios can be for the institutions involved, as you mentioned. So what are the links that you can highlight between corruption, financial crime and an armed conflict such as the one in South Sudan?
BRIAN: The corruption? The links are significant, as I had mentioned earlier, you know, the institutions that are supposed to offer oversight, you know, supervise how government money is i controlled. Things like contracts, spending ,those institutions were was stymied in the beginning. The war is sort of not effective, and they were made or rendered ineffective through the following processes one the appointment of cronies to head these institutions so that these cronies will look the other way when government officials dip their hand into public funds. Second, the legislation governing these institutions was ineffective. For instance, the Anti-Corruption Commission was governed by two incompatible pieces of legislation the Constitution and the Act. In the Constitution. It is stated that the Anti-Corruption Commission has the right to prosecute individuals that it deems corrupt. The Act does not see that, so these are two incompatible pieces of legislation. But and there's a need to bridge that. Government has not been too keen to bridge the gap and unify these incompatible pieces of legislation because doing so enhances the possibility of oversight on. the corruption that is happening and someone high up does not want that to happen.
Third, you see that the institutions are rendered ineffective through a deliberate steering of funds. They're not allocated the funds that would make them do their work as a consequence, they, you know, don't have the required staff. They don't have the equipment. They have challenges in staff retention because people move out when you don't pay them. And so institutions in this country are rendered ineffective and because they're ineffective, they allowed egregious corruption to proliferate, and everyone in in the top echelon of the government was benefiting so massively from this. But then there's also the issue of like a competition developed between the elites for control of the government, you know, because there are no checks and balances.
If you control the government, you have the lion's share of the loot. And this, of course, precipitated a power struggle and a power struggle between the elites in the government. And eventually, the power struggle because of very poor mechanisms and institutions and poor management, the conflict could not be managed properly.
This was a conflict, of course, that did not start off as an armed conflict. It started off as a disagreement. And if you had good managers and you had good institutions within the political parties and within the government, they could mitigate this conflict.
But we had in South Sudan a poor manager in charge. And consequently, of course, the conflict began to manifest itself in violence. And that's how South Sudan was plunged into violence. But violence is also profitable. You know, when you have chaos, you allow certain segments of the elite to benefit profusely from the corruption.
Their business deals to be done. Of course, when war is their preoccupation, things like oversight are pushed to the to the rear, to the backburner. And so, you know, corruption goes on unabated.
So we've seen, you know, the army, the security sector, various sectors in the government and officials of various kinds in the system, benefiting tremendously from this conflict. There are contracts to be to be negotiated with people to supply weapons and weapons that are supposed to be bought at a particular price, but there are marked at four times the price in the global market. So people are benefiting tremendously from this conflict, and they are not too keen on having the conflict resolved because resolving the conflict means instituting processes or mechanisms for checks and balances and ending this corruption. So that's the connection between violence and war insults.
RENATA: Again, what you mention is key, in my opinion, which is the fact that violence is actually profitable, and you have certain figures that benefit from it to benefit from a from a state of war from active conflict in the country. But Brian, I wanted to ask you that The Sentry published a report last year indicating exactly that. That several high-ranking military leaders from South Sudan profited from South Sudan's corrupt system of patronage, both before and after leading forces who committed the mass atrocities.
So can you talk a little bit about the ‘Making a Killing report’ , your findings and also a little bit about the work and mandates of The Sentry.
BRIAN: Yeah, sure. Going back to the question about the links between corruption and violence. This has been a main preoccupation of the century to try to understand those links, to identify the actors who are complicit in in in corruption and with the aim of trying to create consequences that can result in policy change.
So the report in question looked at the activities of four army chiefs of staff and three main opposition militia leaders. We were very curious about the discrepancy between their wealth and the salaries that they receive from the government.
You know, if what you own is far more than what your salary as a government official can bring you. Then there is a problem. And in South Sudan, this is a problem, you can see across the board.
So we started to map out what they owned and we found, of course, significant discrepancies in terms of what they in terms of the wealth they owned, the businesses, the property holdings that they have some abroad, some locally.
And we said in the report that that activity, we first mentioned the discrepancy. And then we also identified that activity, some of it may constitute money laundering. And then also the issue of concern was that some of the people mentioned in the report were complicit in what connected to human rights abuses and therefore in some sense, then there was there was a need to look into the wealth holdings of these individuals, investigate these holdings and bring these people to account. And that was basically the essence of the report.
RENATA: The report was very interesting because it shows in detail that discrepancy, as you mentioned. So it's very clear that the math of what you earn in what you own was not adding up for several public figures. Right. So talking about war, I think that the victims are usually very clear in people's minds, which are the civilians affected, of course. But as for financial crimes and you mentioned money laundering and of course, corrupt practices, sometimes there is a misconception of this being a victimless crime or the victim being only the State. However, as we've been discussing, such corrupt practices can even result in the war and create hundreds of thousands of victims.
So can you share a bit about the reality of South Sudan when it comes to corruption and how it affects the population on a daily basis?
BRIAN; Yeah, that's a very good question. You know, corruption has actually visible victims, although usually we kind of tend to look at the high-level aspect of it, which is the government, and we think it's the government that's the victim, but it really does have victims at the grassroots level. Take the issue of health when you have money misappropriated by government officials, that means that money allocated for the health budget is then non-existent or very small, and not able to bring meaningful impact to the lives, to the health of millions in the country.
So if you take South Sudan as an example in the health budget in the in the national budget health, the amount allocated for health is about three to 4%. That's really nothing compared to the security sector where it's more than 40% right?
And so what does that mean at the grassroots level? That means inadequate health care provision for the people of South Sudan. That means there are no hospitals. That means there are no personnel to manage these hospitals. there's no there's no technical equipment in these health care centres to effectively improve the lives of people. . And so that means what that means a lot of things. That means, for instance, the rate of mothers who are giving birth. The rate of their death is very high. So in essence, if you look at the data about South Sudan, it's one of the most dangerous places to be if you are an expectant mother.
When the pandemic started, , you noticed that in the main hospital in Juba, there were less than there were only three ventilators. You might get that for a country of 12 million people. Why? Because the money that was supposed to cater or to purchase such equipment has been misappropriated by someone in government.
What else do you see? You see a lack of a lack of personnel, and that means what, like a doctors are not available for. For instance, a hospital in South Sudan for a small place is supposed to have a doctor, a nurse and midwife and a clinician or the so-called medical assistance.
You'll find that in most, most hospitals in the in the in the provinces or in the states are non-functional. You find that the listed employees are not there because the government cannot afford to pay them. There were about eight or seven medical assistant training schools in the country, they all shut down and they've not reopened now because no one's actually caring to look into the budget, to improve to reopen these institutions.
The three main universities of the or the country may graduate health of your doctors, but the government cannot absorb them into the workforce because again, corruption has ensured that there's no budget to actually pay for their salaries. So these people then move on to other sectors the private sector, the NGO sector and perhaps the most visible impact of this corruption in the health sector is the fact that health provision or health services become very expensive for the common or average person to afford.
The average treatment for a very common ailment in South Sudan is costs about eight to $10, and that is for malaria. Now, contrast that with the average salary of the government employee, which is $24 a month. So how is that person going to get really any treatment when you have these problems existing?
So that's what I've just described is the tangible and very negative effect of corruption on health care, and you can actually replicate the same thing for other sectors, economy, education and maybe,
RENATA: yeah, I think government corruption is one of those crimes that has a negative impact in almost every single aspect of people's lives when it is very prominent as the way you are describing in South Sudan. So Brian, you are the deputy director of policy at The Sentry which one of the mandates is to track corruption and human rights violation in several countries. And there is this big focus in many African countries that are currently dealing with armed conflict.
So I'm curious to know about your journey. I mean, having this experience of South Sudan, knowing the reality of the country and now working to uncover such issues and bring to light facts that hopefully inspire political and social change. So can you explain a little bit about what led you towards this type of work at The Sentry and also the investigative journalism route?
BRIAN: Yeah. first, I'm not the deputy director of policy, and I am policy lead on South Sudan. That's correct.
I got interested in corruption issues, maybe like seven years ago and an especially. This came about as a result of reading a book by Sara Shea's. It's called ‘The Looting Machine’, and it basically talks about how corruption, you know, endangers or imperils national security. And she has very many case studies from Afghanistan, in fact. In fact, what is happening in Afghanistan right now, she predicted it a long time ago in that book, which was written in 2015, so and I tried to contrast that, you know?
OK, so let me back up a bit. There were many case studies that she delved into. one was Egypt, Tunisia, Azerbaijan, I think. But of particular interest was the similarity of those cases to South Sudan itself. That's really what struck me most and looking at South Sudan, you can see the State capture literally all institutions of government have been captured and rendered ineffective in the fight against corruption. So the government appoints cronies to head these institutions so that these cronies look the other way and facilitate the looting of State funds. They allow conflicting legislation to be on the books so that you can't really fight anyone for corruption.
They still have the institutions that are supposed to offer oversight and hold government officials accountable on corruption issues. The state of these institutions, of the funds that are required to make their work effective. So and again, looking at like, who's making money in South Sudan?
It's like people close to high level government officials. Those are the ones that are benefiting. Month after month in South Sudan, there's a leakage of government documents showing egregious corruption. And if you look at the entities that are benefiting from this corruption, they seem that there's a particular a pattern to that. They come from the same area as some leaders of the country. They come from the same circles as those leaders. And so that really that really got me interested in in trying to make the connections between corruption and war.
And I read deeper and deeper and the and then the opportunity at The Sentry opened up and I was fortunate enough to have been selected to be in this position. So that's how I came to this situation, this interest in the links between corruption and civil war and other negative effects on society.
RENATA: Yeah, one of the things that is interesting about the Sentry, well, interesting and amazing, really is that a lot of the reports that are published do inform policy and action. If I think about sanctions actions, for example. So I wanted to ask you based on your professional experience, thinking about war, thinking about financial crime and how that is interlinked. If you could change something in the system being the legal system, the financial system, sanctions authorities change something to better support those victims, such as those in South Sudan, that we have been discussing. What would you change?
BRIAN That's a difficult question. What would a change to support the victims in South Sudan? Is it on the international system or locally? Locally, I could say that there needs to be a lot that happens in South Sudan. One is to look into right now the provisions of Chapter Four of the peace agreement, which called for a profound overhaul of all the institutions in the country that are supposed to offer oversight on government action or government spending. There are about 18 to 22 of them that are listed, and these are institutions that we have a century of mapped out to have been recaptured, captured in the essence that they work at the behest of a senior government officials and not for the people. So that should that that will be one way to go, to have to have their National Legislative Assembly, take a thorough look into those institutions with the aim of overhauling them. Overhauling them in terms of leadership, who heads, who heads these institution institutions. Overhauling them in terms of reforming legislation, making sure that not only should the legislation spell out the wrongdoing that is taking place, but it must create tangible consequences for those behind egregious corruption. And also when, it has spelled out the consequences. Ensure that actually when anyone has been accused of corruption or convicted of corruption, they have to go to jail for it or pay the price for it to send a clear message that corruption will not be tolerated.
And this is what has not happened in South Sudan and is not happening and we need to take in South Sudan. There needs to be a thorough look at the current leadership in the country, too, you know, and examine their record on corruption and then also take a look into the future to see if these are the kinds of. Is that the country needs if it if it is really to progress or move on, you know, to a better future.
This is a question that the South Sudanese themselves have to re-examine with a lot of care and effort on the international level. Financial institutions should up their game in ensuring that corrupt funds from South Sudan do not circulate in the international system.
You know, corruption is just not the action of one individual or entity in South Sudan. Usually, corruption involves an array of individuals. There is the local actor. Then there is the enabler of corruption, the person or the entity that allows this corruption to proliferate.
And by that, I mean, all transactions in South Sudan really happen in the US dollar and that. And at some point that money gets into the financial system and there's a record of it and it it comes all the way to the US because if you do transactions in the US dollar, that's where a clearinghouse is.. There is need for the international financial system to take steps to ensure that illicit funds from South Sudan that fuel war does not enter into the global financial system for circulation. And when you hit corrupt actors in the pocket, that really sends a very strong and clear message and will play a great role in enabling the end of conflict or the proliferation of conflict in South Sudan.
RENATA. Thank you for listening today. Please do visit our podcasts page on Refinitiv dot com. And we hope you'll join us again soon for another episode of the Financial Crime Conversation podcast.
