The world of dirty money is one in which Chris Okemo and Samuel Gichuru are midgets rather than “lords” - Part I

I am attracted to write about dirty money because of two outstanding feature stories I recently read. The first is the cover story in the Nairobi Law Monthly (NLM) magazine Vol.2 Issue 7, July 2007 entitled "On the trail of Kenya's lords of dirty cash" written by Michael Rigby. This is the most revealing account yet, of the web of illicit money flowing across the world, written from a country perspective. Kudos, Mr Rigby.

The second is an article entitled "La Dolce Viagra" in the July 2011 issue of Vanity Fair. Yes Vanity Fair. This is a stunning but pleasurable expose written by Evgenia Peretz and Federica Rampini about Silvio Berlusconi the 73 year old Italian Prime Minister's nights of "bunga bunga" parties in his basement disco and the web of corruption, abuse of power and wealth concealment that goes with the impunity of power even in a so-called democratic developed country. Papi Silvio as he is popularly known by his army of young lovers is standing trial one more this time for allegedly sexually abusing a minor (a 17 year old Moroccan belly dancer, Ruby Rubacuori (ala Ruby Heart Stealer). How will Papi Silvio get out of this one? The plot thickens.

These articles tell a tantalizing story of how greedy, corrupt and unethical politicians in positions of power and influence use their influence to make laws work for them, to loot the state in consort with crooked rent-seeking business people (mostly men) in local and multinational companies who often have close business relationships with the most important politicians to launder their loot abroad into havens of secrecy utilizing a web of secrecy services globally. They are aided in this dirty business by banks(big and small) eager and happy to serve their "net-worth individual clients" (wealthy people) by colluding, sheltering , channeling and cleaning up the dirty money in off-shore jurisdictions specifically designed to aid and benefit from secrecy. Accountants, in particular the large global ones, help in this process by devising and using accounting rules that make it impossible to reveal the extent of the looting so as to conceal the wealth and profits that are then transferred abroad. The lawyers kick in by devising legal entities (fictitious companies, Trust entities etc.) and legal rules designed to conceal the real human persons behind the dirty transactions and to keep them out of jail. The media help by focusing only on the juicy role of local politicians ignoring the web of actors behind the laundering of money. And of course if you are Papi Silvio you simply use your media empire to go after any persons or institutions threatening your interest. If you are not Papi Silvio you strike cozy relationships with the owners of the media or put them on notice of a destructive legal suit should they dare .

In this 4-part blog I will try to draw from the on-going Kenyan case covered by the NLM to show that this is the tip of the iceberg as far as dirty money flows are concerned. The term increasingly used is "illicit capital flows". I will introduce the web of secrecy, collusions and the players that drive and sustain the world of illicit money flows. In part 2, I will detail the role of these players and the conditions that allow them to thrive. In part 3, I will demonstrate the scale and implications of this dirty money world and in that you will find that objectionable as Mr Okemo and Gichuru's alleged behaviors are, they are far from being lords. They are but midgets in the game. More over we will discover, surprisingly, that corruption and bribery of politicians – significant and nasty as this may be – are simply not the main ways by which capital moves illicitly out of our economies. The main culprits are corporations and the main channels are banks and international trade in goods and services. In part 4, I will argue that complex as this web may seem, it can be broken up. Implementation of the 2010 Kenyan Constitution is a unique opportunity for Kenyans but above all, to tackle this effectively requires regional and international approach. Tackling this menace is first and foremost political without which no technical solution works. This is why active civil society is so crucial.