The Connection Between Money Laundering and Corruption

Economic crimes have always affected both individuals and the society in disastrous and overwhelmingly manner in that they can lead to economic instability or the total decline of a country’s economy (Sibudubudu, 2003). “Money laundering is the process by which one conceals the existence, illegal source, or illegal application of income to make it appear legitimate” (Schroeder, 2001, p. 1). Such income should be as a result of a criminal offense and the perpetrators are trying to hide it or cover up for it to be acknowledged as ‘clean money’.Corruption on the other hand is defined in terms of Section 24(1) of the Corruption and Economic Crime Act (CECA) as the act of a public officer in respect of his duties which is influenced by gifts, promise or prospect of any valuable consideration by him or from any person. This work is set to substantially illustrate the failure of Botswana in combatting the two crimes by use of examples and case law.

Botswana made its first action to combat economic crimes such as money laundering and corruption by passing the Proceeds of Serious Crime Act in 1990 which empowered investigatory bodies to confiscate movable, immovable and liquid assets they reasonably believe to be proceeds of serious crime such as drug trafficking, human trafficking. This often ensues where the suspects are unable to account for the wealth they possess or the investigations on the part of law enforcers directly led them to the assets. This was evidenced in the case of Bakang Seretse where the Directorate on Corruption and Economic Crime seized his assets following a murder investigation which pointed to him being an accomplice by having consented to the use of his business bank account as an avenue to launder money looted from the National petroleum fund thus his assets were believed to be proceeds of the looted money (Mmegi, 2019). However, there it is normally difficult for law enforcement officer to implement the Act as they have to seek an order to confiscate from Court which itself is a tedious process and this may offer a way of escape for suspects as they transfer the liquid assets to other accounts hiding them and this retards the Botswana’s efforts at combatting the two crimes.

Second to the Proceeds of Serious Crime Act, Botswana enacted the Corruption and Economic Crime Act of 1994 which created the institution of the Directorate on corruption and Economic crime (DCEC). It vested in the institution the power to investigate corruption and economic crimes including money laundering following a reasonable suspicion from reporters. In terms of section 10 of the Act, the investigators are empowered to arrest those suspected of corruption and economic crime, to search their properties and seize any assets believed to be reasonably connected to such offences to enable them to carry out their investigations and generate evidence that is probative of their case so after which they hand over the docket to the Directorate of Public Prosecutions (DPP) to prosecute. The Act nonetheless does not provide for the independence of the investigators as section 4 of it states that the institution is under the office of the President and the appointments and budgets are done by that office thus they may not satisfactorily and to the best of their ability execute their functions due to limited resources of the state and centralization of power respectively.

Institutional Framework

This refers to institutions in place whose activities and functions are directed towards fighting corruption and economic crime. Botswana has several of them and for the purposes of this writing I will start with the DCEC.

This institution is a creature of the CECA and was born of out of the turmoil that characterized Botswana in 1994 that is, the influx of corruption and money laundering cases then (Fombad, 2001), and was put in place to police such by investigating, arresting suspects, searching and seizing assets and assisting the DPP by giving it the evidence they generated in their investigations which is requisite in prosecutions to register a conviction. In recent case of the former director of the Directorate of Intelligence and Security Services (DIS) Director General, Isaac Kgosi’s alleged corruption, the DCEC played a significant role working hand in hand with other law enforcement agencies to investigate, arrest, search and preparation of Kgosi’s docket which is still an ongoing trial (Sunday Standard, 2019). However, the independence and effectiveness of the DCEC as a specialized agent to fight economic crimes has been questionable. The agency seems to be overshadowed by the powers of the President of this Republic, for instance, the agency is based within the office of the President, the President determine what is considered grounds of national security hence he has the power to ban the directorate from accessing documents or premises, and also the Director of DCEC is appointed by the President (Kruis, 2013). “The unit’s closeness to the president had led to criticism that the DCEC will only investigate petty corruption” (Bertelsmann, 2014). Recently, there have been criticisms circulating that alleges the former President of Botswana Sir Seretse Khama Ian Khama to have been the most corrupt president of Botswana, this was proven by the nepotism and patronage that has been aligned with the respective former President. Ditlhase (2012) reported that most of the appointments that were made by President Khama were either family or close friends (Kuris 2013).

The lack of prosecutorial powers on the part of the DCEC also is a self-defeating feature as the institution is politicalized and hence those of high profiles particularly subscribing to the ruling party always have their cases acquitted attributable to favoritism (Badham-Jones, 2014). Most importantly the body delegated for prosecution seems to be lacking technical expertise in dealing with corruption cases, all the high-profile suspects cases they dealt with were acquitted, most often on appeal due to legal technicalities that some critics saw as trivial (Kuris 2013). This loophole can be filled with giving the DCEC prosecutorial powers since they carry out investigations and have necessary skills and equipment to deal with combating economic crimes.

In conclusion, Botswana has implemented legal acts and institutional frameworks to combat economic crimes most notably corruption and money laundering but the extent or prevalence of corruption and money laundering is of great concern as it proves that this legislation, policies, institutional or procedural frameworks are actually not effective even though they slightly help. According to the Transparency International Corruption Perception Index (CPI) Botswana is one of the least corrupt countries in Africa (Transparency International, 2013). Likewise, The Worldwide Governance Indicators (WGI) reported in 2003 that Botswana showed good performance of 85.85 per cent as compared to 2013 performance of 79.43 per cent (The World Bank, 2013). Botswana should be well credited for its good performance for the past years both regionally and internationally, however it should be noted that there is still corruption in Botswana. This good records does not make Botswana any better country if there is still practice of corruption and money laundering taking place. Therefore the effectiveness of economic crime management is still questionable in combating such offences and also many cases may still be uncovered because of some factors which makes Botswana to have failed to contain the scourge of money laundering and rampant corruption.