Judicial Corruption and What Can be Done About It

The judicial system in this country is one of the most corrupt segments of society. Yet, I have never heard of a judge being arrested or charged with corruption.

This is even when it is abundantly clear that the judge was influenced in rendering a decision. If these magistrates were “massaging” the law in an effort to be fairer than the law is, this would be legislating from the bench which is still wrong but certainly more tolerable. But fairness has nothing to do with it.

Technically, judges are independent from the government and judges seem to take this independence quite literally. They are also independent from the law; independent from the facts; and independent from any semblance of ethics or propriety.

I asked an official in the ministry of justice why it was that despite the recent anti-corruption drive in the country, no judge had ever been charged with corruption. He explained that corruption was very difficult to prove since the judge could always justify his decision by stating is was judicial error. The most the government can do is to transfer them to a less desirable court or, in very rare cases, revoke them. Basically, incompetence is a judge’s best defense.

Because there is no fear of real sanctions, most judges are not afraid to render blatantly wrong decisions. The attraction of the bribe, which amounts in many cases to more than the judge can earn in an entire career, is much more potent than the fear of being transferred to some remote town where they will be handling disputes over goats.

In fact, the amount a judge was bribed in a case is often an open secret. My father died about a year and a half ago and as in most inheritance situations, siblings have been battling each other in court. One of them convinced a judge to order a marriage certificate to be drawn up for his mother, after getting the judge to order a birth certificate be issued to him. So after my Dad died, he mysteriously reemerged to have a 50 year old son and to get married. The marriage certificate clearly states:

On this day ….[3 months after my Dad died] Before us, appeared publicly….

The judge signed and certified the birth and marriage certificates. Some of my siblings who heard about this immediately petitioned the court to have the order nullified. Unfortunately for them, they ended up before the same judge who of course, stuck to his guns. This case created enough scandal that the judge was sanctioned pretty quickly. Although he was not transferred, he was sent cases of no significance. This meant that his bribe income dropped significantly. He complained to whoever would listen that he had jeopardized his career and had only received less than $3,000 for that court order and now realized it was not worth it.

In another case, a different sibling was able to get access to a bank account that held more than $2 million in it. In this case, he went judge shopping which is always a risk because the judge that doesn’t get the deal will spread the word. He first went to the only judge that had territorial jurisdiction over the matter. We don’t know all the details but the arrangement broke down and the sibling moved to another judge in another court. This judge, who was outside of the proper jurisdiction, requested about $20,000 to sign the court order. My sibling borrowed funds and came up with a $4,000 deposit, promising the rest when the order was signed. Days turned to weeks, and the order was still not signed. Eventually, the sibling realized that the judge had no intention of ever signing. He couldn’t very well ask for a refund.

He then found a judge, again who was completely outside the jurisdiction. Imagine a New York court having jurisdiction but you manage to get a Washington, DC judge to sign your order. This judge unfortunately was much more expensive but he came with a guarantee. He would get the President of the Court of Appeals of his jurisdiction in on the deal which would ensure that the decision would not be overturned. For that, he would require $80,000. After much negotiation, they agreed the judge would be paid when the funds were released from the bank. $80,000 to get $2 million seems like quite a deal.

Another sibling (the one with the birth and marriage certificate) filed criminal charges and tried to get his brother arrested. He paid about $16,000 for that arrest. The sibling who was arrested was later released pending the rest of the investigation. Since he had not been able to spend all of the $2 million before getting caught, there is still over $1 million blocked. Recently, he received a call from a government official offering to have the funds released and his case closed for a mere $40,000.

What I find truly remarkable is that I don’t see or speak to either of these siblings and received none of this information from them. I only know the details because they are just not a secret. These details are out in the public domain. I could go tell officials in the ministry of justice but I might just end up with the one who offered to fix everything for $40,000.

Besides, I will get the same response. Even though they know that corruption was involved, this is impossible to prove. Unlike in the US or Europe were you could talk about wire fraud and follow the money trail through various front companies and financial institutions, we live in a cash society. Unless any of them got a receipt for the money they gave these judges, the cash will be difficult to trace.

Not all judges are corrupt but the honest ones are becoming more and more frustrated. I have a friend who is a judge. He has never been involved in any of my cases but I often go talk to him because he always has good advice. I remember the first time I went to see him I was in tears because my case had been dragging on for so long it was going to bankrupt my company. His advice was to try to find a way to take the case outside of the country! Usually though, he is quite supportive and encourages me to persevere.

This last time, I spent two hours in his office trying to console him. He was discouraged, disgusted and even despondent over the state of the judiciary in the country. Judges he had always respected and admired were now involved in some of the most corrupt cases in the country. There was no incentive to be honest. No incentive to apply the law. In fact, judges who try to remain ethical are more and more ostracized by their colleagues.

This society is broken to its core. The lack of a fair judiciary impacts all segments of society. How do you enforce a patent for innovative technology you have developed? How do you enforce a contract? How do you obtain justice when victim of a physical crime?

For the last few years, I have been mulling about developing a software application for the judiciary. I know they won’t buy it but if I can build it and donate it, they won’t be able to refuse. This won’t stop corruption but it might help to bring more transparency to the system. For example, there would be systematic checks and balances in the system. Gone would be the judgments which are registered and executed before they are rendered (that has happened to me twice!). We could build a system that would be accessible to judicial authorities so that they could monitor cases from their desks instead of waiting for reports that might come too late. We could build in business intelligence that displays in charts and graphs how long cases are taking from beginning to end. The reporting could be by judge, by type of case, by jurisdiction, by lawyer, by party. This will not stop particular lawyers from always going to particular judges but at least this would more obvious.

Perhaps if God led a technology entrepreneur into the jowls of judicial corruption, He intended for me to do something about it. Perhaps God has nothing to do with it and I am still living in denial, hoping that the system can change, despite the evidence that it doesn’t want to. That’s the problem with entrepreneurs. Passion often overrides logic and leads to all sorts of justification for charging forward, blind to the reality around them. That is our greatest fault but it is also our greatest asset.

So I better start forging ahead with my judicial application…

Finally! A Change in the Tax Law That Makes Sense

One of the things that has most frustrated me about this country over the years is that a company cannot file its yearly tax return itself. To submit your tax return to the tax authorities, it must be certified by an approved chartered accountant.

We generally don't have many transactions over a period of a year even if the amounts of each transaction can be substantial for the country. Our tax returns are therefore pretty straight forward. We employ chartered accountants who could very well have prepared our returns but the law did not allow this.

As a result, we have always had to use an outside accounting firm. This can become very expensive. They charge you one amount to prepare the return and another to certify it. On an average, we end up with a bill of between $6,000 and $10,000 for a very straight forward return.

Last year, we thought we would be smart and have an accountant prepare the return and then just get the certification from the accounting firm. The accountant works with a network of accounting firms and she gave us a quote of roughly $600 for the certification. We already found that amount excessive but this would be cheaper than having the accounting firm do both.

When the accountant completed the return, she took it to the accounting firm for certification. They wanted $3,000. Why? Because the accountant had underestimated our income when she quoted the $600 and these accounting firms base their fee on the client's tax revenues and not on how much work is involved. We tried other firms but they were all in the same range or even higher.

I just noticed in the new 2010 tax laws that this certification is no longer required. This is really excellent news. There are many small business who simply can't afford to submit a tax return even if they owe little or nothing simply because they cannot afford to get the return prepared by an accounting firm or get it certified.

Some people (the accounting firms) point out that this will result in increased fraud. I disagree with this entirely. First of all, the accounting firms just sign and stamp. They don't really look at the document. These are not audited by the accounting firms, just certified. Moreover, more companies will now be able to afford to file their taxes which reduces, not increases fraud.

I also think that the accounting firms will have to provide added value (like tax advice or revising the tax return) rather than simply certifying it for a fee.

I have not looked at all the provisions in the new tax laws and I am sure to find some that I will cry over. But at least this one is really quite positive.

Paying for Air or a New Utilities Billing Concept

Our office here just received its monthly water bill a few days ago. About $30. This is a lot for an office and it is twice what we were paying about a year ago. Worse, the water service is so infrequent that we often go several days with no running water. I asked our accounting manager why the sudden jump in the cost when we were using less water.

The accountant explained that we were paying for air. Yes. Really. After noticing that our bills were unusually high given the usage, the accountant and a plumber did a test. They checked the water meter when there was no service and noticed that the meter was running. After some tests, they realized that whenever we opened any water faucet or tried to flush the toilet, the meter would count that as water used! I thought this was impossible.

A couple days ago, I ran into the water meter reader. He seemed friendly and I asked him about this strange billing. He actually admitted that this was indeed the case and that many people were complaining about it but that there was nothing he could do.

The water utility was privatized a couple years ago as one of these World Bank / IMF imperatives. The quality of the water has not improved; the service has gotten worse and the prices have increased. I was in the office of the CEO of the water utility once and I thought it was very telling that he had bottled water on his desk!

I have not seen the new financial results for the water utility. I would not be surprised to see that their profitability increased substantially. After all, they are the exclusive distributor of paid air in the country.

Business Insider Article on Corruption in Africa

http://www.businessinsider.com/ recently published an article on corruption in Africa.



I don't have the other side of the story but this is a very common tale which is certainly not unique to Senegal. Few, if any, of these large licenses or concessions occur without corruption. I am not saying this happened in Millicom's case and I certainly have no inside information but a lot of times these stories become a scandal only when "corruptor" and "corrupted" stop seeing eye to eye.

I read comments that Millicom's license had been revoked for number of years ago but they were still able to do business. Under what agreement? Why didn't Millicom protest then? I am not in any way defending the government of Senegal but in the game of corruption, it takes two to play....

This should serve as an example to other companies who tend to close their eyes when they first want to get in and then are surprised when their former partners come begging for more. I remember meeting a delegation of one of the largest US telecom companies coming to the country I am in. They were really interested in the market. They eventually decided that the risk was not worth it. As they explained to me in private, they were not "experienced" enough with the business environment.

African nations should understand that by requiring foreign investors to bribe officials to get these licenses and concessions, they will get a type of investor that is not necessarily a good corporate citizen. Real investors shy away and sharks come in to do business.