“ICAC was meant to be an independent commission” 

Interview: Me Roshi Bhadain

* “ICAC was never meant to investigate all complaints including frivolous and vexatious ones, and it was never intended for it to operate as a parallel police force”

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“In my mind, ICAC must operate more as an investigative body and a specialised commission set up by law as a body corporate to investigate and prosecute corruption and money laundering — rather than operating like the Police and tracking down the so-called “small fry”. This is the only way that the “big sharks” will at least feel some concern and anxiety,” states Roshi Bhadain, barrister-at-law and Associate Certified Fraud Examiner, in this week’s interview, adding, “the cases currently being prosecuted by ICAC in Court could also have been investigated by the Police as there is no specialist skills involved or expert forensic evidence being adduced in these cases…”. Me Bhadain adds that there is always room for improving the effectiveness of any organisation, but “ICAC should presently start operating in accordance with its own legislation and use its existing powers effectively rather than go about seeking new powers”…

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Mauritius Times: We don’t seem to be winning the fight against fraud and corruption, are we? Why is that so?

Roshi Bhadain: I see it as a continual process rather than a fight that is won or lost. It is true to say that Mauritius has come a long way in the last 15 years by passing appropriate pieces of legislations and establishing structures and procedures to mitigate the effect of fraud and corruption in our country. After the Anti-Corruption Tribunal in the mid 1990s, the URB looking into fiscal cases prior to being replaced by the Economic Crime Office (ECO) which itself then replaced by the Independent Commission Against Corruption (ICAC). There is, however, so much more to be achieved.

* The ICAC was established in 2002, close on the heels of the ECO which itself had a brief stint of life when it was decided to wind it up. Earlier it was not common to set up specific institutions intended to be permanent to expose and deter corruption and fraud in Mauritius. Is the establishment of institutions like ICAC simply a phenomenon of modern society or would you think that these crimes have become so complex and pervasive in society that you need permanent and specialised institutions to deal with them?

Permanent and specialised institutions are indeed required, but also we need people within these institutions who have an adequate and relevant skills set and the experience necessary to cope with fraud and corruption. It is certainly not an easy task and it is very important for any institution to strike the right balance and take into account the rights of ordinary citizens, as enshrined in our Constitution, when enforcing the law.

In Hong Kong the ICAC was set up to mainly investigate corruption within its Police Force. There is no Parliamentary Committee to monitor the way ICAC in Hong Kong functions. There is also no Legal Division within its setup and ICAC Hong Kong does not investigate or prosecute money laundering. More importantly where we are concerned, we have to remember we are in a democratic society with our own Constitution as our supreme law, which protects the rights of our citizens. Mauritius has its own way of doing things and our anti-corruption law is based on the Australian model rather than the Hong Kong one. It is a misconception to say that ICAC in Mauritius should operate like ICAC in Hong Kong. It is also a myth to believe that ICAC in Mauritius should have full powers of arrest or powers to tap into phone calls. ICAC in Mauritius is a body corporate, which has been established under a dedicated Act of Parliament and with enormous powers, inter-alia to examine persons, to search premises, to freeze assets and monitor and track property. ICAC should operate as an independent commission of inquiry with powers to prosecute, after the DPP has granted his consent for a case to go to court. The question of arresting suspects is a matter for the Police after an ICAC investigation, not during or before. If a suspect is to flee the country or tamper with documents or interfere with witnesses then in accordance with Section 53 of the POCA, the suspect may be arrested by ICAC officers and not by the Police. Therefore, ICAC does have limited powers of arrest.

In short, the intention of the Legislator was not to create a parallel police force and police officers may only effect assigned police duties within ICAC, i.e. providing security and so on. Of course, a police officer may seek leave from the Disciplined Forces Service Commission and join the ICAC, thus becoming an ICAC officer who operates within the four corners of the Prevention of Corruption Act 2002 and not the Police Act.

* ICAC does not have a smashing track record naming and bringing to shame significant perpetrators of fraud and corruption so far inspite of the fact that it comes armed with a bolstered up legal arsenal and capacity both in terms of personnel and budget outlay. Is this explained by low prevalence of these crimes or is the system of crime detection and punishment not yet oiled enough sufficiently to become effective?

First of all, ICAC does not have responsibility for the investigation of fraud in Mauritius; that rests with the CCID. In this context, there are various areas which need to be reviewed, and it is high time for Mauritius to have a specialised unit to look into serious fraud cases like the Serious Fraud Office (SFO) in the UK. This is one of the main differences between the defunct Economic Crime Office and the ICAC. The Prevention of Corruption Act (POCA) 2002 only empowers the ICAC to investigate and prosecute fourteen specific corruption offences in addition to money laundering. There is always room for improving the effectiveness of any organisation, but ICAC should presently start operating in accordance with its own legislation and use its existing powers effectively rather than go about seeking new powers. There are perhaps other areas to be reviewed, including the use of police resources within ICAC and the selection of cases for further investigation and prosecution.

* Would comparison with the erstwhile Economic Crime Office be unfair?

ECO had a different role, but was so much more effective. Nonetheless, the experience was an important one in the development of the right framework, and finding the right mechanism to deal with the problem of economic crime in Mauritius. It is also important to note that the ECO operated with a budget not exceeding Rs10 million, and in this way it was also more efficient than the ICAC, which has a budget of over Rs100 million.

* In other places (such as the UK), those involved in serious corruption and fraud are tracked down even after they have served their term to make sure that they are denied the enjoyment of their ill-gotten gains. How close have we come, in Mauritius, to this system of crime deterrence in practice?

Mauritius is developing the law on confiscation and seizure of criminal assets and a lot of has been achieved in this area, especially in cases related to drug trafficking and money laundering. In the UK, the Serious Organised Crime Agency (SOCA) has also taken on board the Asset Recovery Agency (ARA) and this has proved to be very effective. In Mauritius, the ICAC needs to develop a specialised unit with responsibility for asset tracing and monitoring and for tracking of property which is derived from proceeds of crime. This will be a giant step forward.

* The former Chairman of a local bank took it up on himself to pocket money by fraudulently selling the bank’s duplicate shares in foreign jurisdictions; he was tracked down by the authorities in the UK and would have been sent to the gallows had he not been found to be medically unfit when it came for him to stand trial and answer the charges. What, in your opinion, would explain that, for all the time he was active from Mauritius, no one had bothered to indict him despite rumours being afloat about his misdeeds?

It would not be appropriate for me to comment specifically on individual cases. However, it is true to say that things have evolved since then and that there are more resources available now to enforce the law and to ensure that these kinds of fraudulent activities are prevented, or detected and investigated — as compared to the resources which were available when this particular case occurred.

* You have been involved, right from the very beginning, in the investigation into the MCB fraud. With hindsight, what would you say were the major handicaps the investigation then suffered from?

ICAC is empowered to investigate corruption and in certain circumstances money laundering cases but not fraud, as I explained earlier. Also, ICAC could only prosecute offences which occurred after the coming into force of the POCA i.e. April 2002 as criminal law is not retroactive. It is now public knowledge that the particular scheme in the case you mentioned had been in operation since the late 1980s and the early 1990s. I must say that the challenges that arose in terms of investigation reflected the size and complexity of the case and also the legal parameters to be observed, rather than other handicaps. In 2006, however, the Legislator chose to amend the Prevention of Corruption Act to allow suspicions of money laundering to be directly investigated by the ICAC, rather than having to wait for a referral from the FIU.

* Can it be said now that the long arm of politics constituted a major handicap in that inquiry?

As stated, any challenges that arose did so because of the size and complexity of the work and not other issues. It is true to say, however, anywhere in the world where major financial scandals are uncovered the names of politicians and the long arm of politics do not lag far behind. The British Aerospace case in the UK, which was being investigated by the SFO, is a clear example of this, as reported by the British press.

* Would you say that it might have been better if it were left to the police to inquire into this case?

The police did conduct inquiries into aspects of theft associated with this case. I do think that coordination of police resources and ICAC is an area where there can be fruitful evolution. The investigation process of the ICAC is circumscribed by law, and it has the power to conduct private and also public hearings, which it has chosen not to do so far.

* In that same MCB case, which went public in early 2003, a court judgment has blamed one of the bank’s officers for the massive fraud lasting over such a long period. This is looking very similar to a recent judgment given by a French court laying the blame for trillions of mishandled dollars in a French bank on a single officer of that bank. Are you satisfied that it would be enough to lay the entire blame on one individual to appease the thirst for full-blown transparency in such cases? Is not banking an activity that is supposed to be undertaken with different independent levels of authorisations and controls?

These are issues which are still sub judice, and as I understand an appeal has been made to the Privy Council, so it would not be appropriate to comment on specific cases. It is fair to say, however, that in all cases where such problems have arisen in large organisations, especially in the private sector, major structural and policy changes have taken place. These tend to be forward-looking aimed at avoiding similar problems in future. It is true to say that previously banking was mainly based on trust but now it is a more compliance-based activity. Banks are required by law to report suspicious transactions, which they come across and have to train their staff and know their customers and the source of their funds.

* We know that whistle-blowing is protected by the law. The risk is that you can have whistle blowers with malicious intent who just want to splash the mud over those they don’t like or want to hurt. How does an investigator strike the right balance to protect unnecessary propagators of false information who would otherwise walk away from the “crime” after inflicting untold damage to innocent parties?

‘Whistle-blowing’ is one of the most effective mechanisms to detect fraud and corruption. This view was reiterated by President Obama during his first visit to Africa in Ghana where he explained that good governance in Africa needs to be implemented through empowering employees to report fraud and corruption by making available to them dedicated hotlines for this purpose. Now, in the case of ICAC, it is well known that anonymous complaints are also taken into consideration and investigated. This is why Section 46 of the POCA makes it mandatory for the ICAC to conduct a ‘preliminary investigation’ within a limited number of days prior to proceeding with ‘further investigation’ under Section 47 of the POCA. The intention of the Legislator is clear in as much as only serious genuine cases need to be looked into, and the ICAC should concentrate its efforts, energy and time on these few important cases. ICAC was never meant to investigate all complaints including frivolous and vexatious ones, and it was never intended for it to operate as a parallel police force using police officers who exercise their powers under the Police Act. ICAC was meant to be an independent commission, which conducts enquiries into important and high profile cases of corruption and money laundering.

As regards the law on whistle blowing, Sections 48 and 49 of the POCA deal sufficiently with the protection of informers and witnesses. In practice, however, the question is not so much as to whether an issue is true or not, but whether there is sufficient evidence available to support an allegation. I believe that the ICAC should avoid commencing an investigation where there is little or no prospect of success, as this only leads to wastage of resources. This is an area of critical importance, where there is room for improvement, as in my view additional safeguards need to be built into the law.

* Will there come a day when society will be free of fraud and corruption? If that remains an ideal, what’s the point really in tracking down the “small fry” while the “big sharks” swim out most of the time blithely to the safety of the high waters? Can you honestly say that we have made a sufficient dent in the system to really deter fraud and corruption?

I think significant progress has been made over the last fifteen years or so. Structural changes take time and changing perceptions and mentality may take a longer time. The future lies with the new generation, which is highly influenced by changes in technology and the way business is conducted generally. We have to move with time and the fight against fraud and corruption also falls into this category. For instance, there are so many data mining tools, specialised software and other technological assets that are available these days to facilitate the evidence gathering process. In the meantime, we can make a difference by continuing to evolve and develop the tools we have to detect fraud and corruption. In my mind, ICAC must operate more as an investigative body and a specialised commission set up by law as a body corporate to investigate and prosecute corruption and money laundering — rather than operating like the Police and tracking down the so-called “small fry”. This is the only way that the “big sharks” will at least feel some concern and anxiety. The cases currently being prosecuted by ICAC in Court could also have been investigated by the Police as there is no specialist skills involved or expert forensic evidence being adduced in these cases.

* Why is it that those in high places seem to have got away in the MCB fraud and Air Mauritius ‘black box’ cases?

We have to respect the criminal justice system and remember the burden of proof is on the prosecution, and that economic crimes are sometimes very difficult to prove. We should also give due credit to defence counsels who work hard to ensure that the rights of the clients are respected as required by law. The system should only function in this way for the best interests of our society. Everyone is presumed innocent until he has pleaded guilty or been proven guilty. It is also important to note that no one is proven innocent.

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* Published in print edition on 29 October 2010

Tags:Air Mauritius, FIU, ICAC, Interview Me Roshi Bhadain, Mauritius Times, MCB Fraud, PoCA, Serious Fraud Office