New U.N. Pact On Global Corruption

Top officials from around the globe gathered Tuesday to adopt the first worldwide anti-corruption treaty, a move that may open banks in money-havens to more scrutiny and allow some poor countries to recover billions of looted dollars.

U.S. Attorney General John Ashcroft and Mexican President Vicente Fox were among the first in line to sign the U.N. Convention Against Corruption, a pact that requires countries to aid in investigations and return money to wherever it was stolen or embezzled from.

The convention, expected to be signed by over 100 nations, will put both rich and poor ones on a more equal footing when it comes to tracing and returning scandal-tainted money that often winds up in wealthy banking capitals.

Corruption "is a tax on the poor," Ashcroft said in a statement prepared for the conference. "It steals from the needy to enrich the wealthy. Corruption must end."

The treaty got significant support in the developed world, and the United Nations stressed that corruption is not just a problem of developing nations. The pact requires signatories to fight theft in the corporate sector and punish companies that pay bribes, including large, multinationals.

"Bribery ... was simply a part of human nature, a trivial issue, or even promoted as a normal business expense to be deducted from taxes at home," Ashcroft said, describing attitudes prevalent just a decade ago.

Now, Ashcroft said, corruption "jeopardizes free markets and sustainable development. It provides sanctuary to the global forces of terror."

The treaty also requires governments to enact laws against corruption, protect whistle-blowers and assist other countries in detecting illicit funds.

That could help poor nations like Mexico and Nigeria recover looted money kept in banks in Switzerland and the United States.

Nigeria has spent more than four years trying to recover $2.2 billion taken by late Nigerian dictator Gen. Sani Abacha.

And after six years of haggling over $9 million in bribes deposited by a former Mexican prosecutor in a U.S. bank, the United States turned over less than one-tenth of that amount to Mexico.

The pact, the first to cover Asia and Africa, may help developing countries by ensuring their systems are cleaner and more creditworthy, the U.N. said.

"Donor countries and financial institutions like the World Bank have instituted strict anti-corruption policies to regulate the granting of loans and donations," the U.N. statement said.

More of interest to Ashcroft and the United States may be the treaty's effect in requiring other countries to open up money laundering investigations, expedite extraditions and prevent the establishment of phantom banks with little legitimate business.

While the pact doesn't require countries to repeal banking secrecy laws or the immunity from prosecution granted to some politicians as part of their tenure in office, it does require safeguards so that politicians can be held accountable for their acts and banking records can be examined.

What remains unclear is whether the treaty will be signed by many of the so-called offshore banking havens like the Cayman Islands, Liechtenstein and Luxembourg. It will take effect once ratified by the congresses of at least 30 signatory countries.