Confiscated Property in Tunisia: From Revolutionary Justice to Prolific Corruption


2015-04-06    |   

Confiscated Property in Tunisia: From Revolutionary Justice to Prolific Corruption

Editor’s note: The Tunisian public welcomed decree-law no. 2011-13 that was issued on March 3, 2011, and called for the confiscation of assets acquired by the former Tunisian President Zine el Abidine Ben Ali, along with 143 of his family members and close associates during his rule. The period in question had lasted from July 11, 1987 until January 14, 2011. At the time it was issued, the confiscation decree was regarded as an act that embodied the fulfillment of one demand of Tunisia’s Dignity Revolution. Among the most prominent revolutionary slogans were those calling for the recovery of assets plundered by the ruling family.[1] Political discourse around the confiscation of these assets took advantage of popular support for these measures, and for liberation from the power that “the ousted family had held over the national economy”. Furthermore, confiscation was celebrated as a step towards enacting the equitable redistribution of wealth among individuals and other entities. Interview for this article were conducted by journalist Hnai J’mai.

The Tunisian public’s anger towards the ruling family prevented any public discussion around the obligation for the confiscations to comply with the right to a fair trial. Likewise, the Tunisian Constitution neglected to protect revolutionary procedures from judicial oversight. Four years after the revolution, The Legal Agenda wishes to raise questions about the effectiveness and legitimacy of the [confiscation] measure in the hope of soliciting a response from the Administrative Judiciary, which has committed to take on legal cases that seek to overturn the confiscation orders.

Who Administers Confiscated Assets?

Our inquiry into the management of the confiscated assets began with an examination of the confiscation order issued under decree-law 13 stated above. This led us to the Confiscation Commission of the Ministry of State Property and Land Affairs. We met with the president of the Commission, Judge Riadh Boujah, who told us that the Commission had overseen “the confiscation of 530 real estate properties, 650 companies, 24,739 items of movable property, 73 billion dollars and 1.5 million Euros, and 173 luxury cars, among other items.” He also said that “the operation included expropriating all material gains acquired since July 11, 1987, with the exception of property gained through inheritance” (an exception that was added later). When we asked about how these confiscated assets were being managed, he informed us that the disposal of the property fell outside the purview of his Commission, and fell under the responsibility of the “National Commission for Management of the Assets and Funds Subject Confiscation or Recovery in Favour of State” (hereafter, “Management Commission”). This Management Commission was established through decree-law no. 2011-68, dated July 14, 2011.

We asked Boujah his opinion of the division of labor between his [confiscation] commission and the management commission. He said that “the choice to establish two committees was ill-advised”. The disagreement between the two committees over who is responsible for transferring the properties to the state is, in Boujah’s estimation, evidence of the poor choice to create two committees.

Thus, Boujah revealed the presence of overlaps and a conflict of jurisdictions between the frameworks [of the two commissions]. He mentioned that the overlap had led to disputes between the commissions, and that the Administrative Court had ruled, in an advisory opinion, to attribute responsibility for transferring real estate holdings to the Management Commission. He told us “that the issue of who should take responsibility for the expenses and procedures for transferring registered real estate property alone, had obstructed the transferral of 120 real estate properties to the state”.

The work of the Confiscation Commission thus appears to be namely, administrative. The commission is in charge of preparing lists of those whose assets would be confiscated, and taking inventory of those assets based on their documented value. This explains the magnitude of the estimates of the value of the confiscated assets, and the absence of a reference to them in the public budget. It also leads us to believe that the estimates of the value of the confiscated assets compiled by the Confiscation Commission are not reliable.

As a result of these findings, we sought a meeting with a representative of the Management Commission. During five different attempts to contact the commission’s president, we received the same reply: “the official is in a meeting. If you wish to speak to him, you must supply a written agreement from the supervising ministry (i.e., the Ministry of Finance).” We attempted to obtain such an agreement from the Ministry of Finance, but despite an earlier promise to do so, the ministry refused to grant us an appointment with the president of the Management Commission.

Convinced that there was a decision to disguise the commission’s work, and in the hope of better understanding the commission’s refusal to talk about it, we sought to investigate how confiscated assets were being dealt with and who managed them. It became clear to us that the Management Commission was not, in fact, managing anything – which may explain its circumspect behaviour. We discovered that the actual administrators of the majority of confiscated assets were members of the judiciary.[2]

A source within the judiciary, who asked not to be identified, explained the connection between the judiciary and the Management Commission’s portfolio [regarding the confiscated assets]. He stated that “in 2011, the General Rapporteur  for State Disputes issued judicial decisions ordering that judicial administrators be named to oversee the confiscated property, until such a time that the state was able to take charge of them”. The same source revealed “that the judiciary assumed a temporary obligation to administer the confiscated properties, in order to guarantee the rights of all parties, including the state. Upon the creation of the commission to manage those assets, the judiciary asked those who were in charge of their disposal to make contact with the Management Commission and request that they initiate proceedings to hand over the confiscated assets, so that the commission could assume management of them. However, the Management Commission and the Ministry of Finance both refused to reply to any correspondence. The commission’s inaction led to continued judicial management of the confiscated property”.

We asked about the managers’ handling of the confiscated property, and about the reliability of information stating that “poor management that led to the bankruptcy of a number of institutions, and the damaging of a number of items of movable property”. Our source within the judiciary confirmed that the large number of confiscated assets, and the complexity of the measures taken to secure them had led to difficulties in their management. He noted that the judiciary’s management of the assets had been assumed to be only a temporary measure. Because it seemed to us that this was a sensitive question, we decided to go directly to the judicial officials who had been managing the confiscated property.

Some Confiscated Companies Nearing Bankruptcy

We posed our question about the financial status of the confiscated properties to Nabil Abdelatif, whom the court had entrusted with the management of one of the confiscated companies. He replied “that a number of the confiscated institutions placed under the judicial administration are suffering from financial difficulties and are on the verge of bankruptcy”. He pointed out “that falling revenues of some of the confiscated institutions, and others nearing bankruptcy, is due to the fact that their previous owners had unrestricted powers and were selectively accommodated, both in legitimate and illegitimate ways, in order to increase revenues and achieve a high rate of profit. Judicial administrators do not enjoy such powers or [accommodations]; consequently, it is only natural that revenues should decrease. This explains, to some extent, the financial problems facing some of these companies”.

In Abdelatif’s view, the deteriorating state of some of these institutions is due to the fact that the law regulating the [confiscation] operation was impromptu and imprecise. “It was necessary to specify a period of time for confiscating assets that did not exceed a year, to avoid opening the door to haphazard management of those properties, he explained. “Subsequently, a decision was adopted in these companies either to sell them, in the presence of representatives of the Confiscation Commission, the Management Commission, and judicial managers of the assets (or their judicial trustee and creditors), or to incorporate them into companies experiencing financial difficulties, or to sell them or place them on the market, so that they can meet their expenses and preserve some of their profits rather than continue to fall behind.”

Abdelatif confirmed that “during the four years that have passed since the Tunisian revolution, [public] general directors were placed in charge of managing the affairs of institutions whose state ownership levels exceed 80%, and they were granted broad administrative powers. These appointments have opened the door to excesses and to irresponsible management”. Abdelatif also revealed that those directors were not employed in accordance with the law regulating public service, which determines the powers of the officials responsible for public institutions and specifies how they work.

Abdelatif’s claims in this matter were also confirmed by the General Rapporteur for for State Disputes. Judge Emad Abdali told us that “some of the property, such as boats, yachts, cars, and planes, is partially damaged because, for four years, it has been exposed to the elements of nature and a lack of maintenance”. He added that “those properties were overseen by court-appointed administrators who did not have the legal right to sell or liquidate the assets, nor to manage them in any way”. He added that “failing to lift judicial trusteeship [over the assets] was ill-advised”, and asserted that the confiscated companies were placing a serious, material burden on the state.

In sum, [the process of] confiscation had become a burden on the state, and that state administration of confiscated property had been transformed into a case of corruption. The reasons behind this corruption are numerous and are linked to practices of bureaucracy, opportunism, and negligence. One such reason was the administrative bureaucratic decision to split the confiscation responsibilities among different commissions that were not coordinated in their work. Another was the reliance upon commissions made up of a limited number of people, the majority of whom were part-timers. Other reasons included: a lack of oversight by the entities executing the confiscations over the actions of those who were actually managing the confiscated properties; opportunist management of the properties, particularly in the case of larger companies that were sold; as well as, the avoidance of administering portfolios [of confiscated properties] that deserved effort and labor.

Consider for instance the process of confiscation conducted by the Minister of Finance. The ministry selected some of the largest and most iconic Tunisian companies, made up mostly of banking institutions (or institutions with shares in banking institutions), as well as transport and communications companies, and singled them out for special treatment through [placing them under] the Al Karama Holding Company, in order to subsequently sell them off to private investors.[3] It remains unclear as to how Al Karama Holding managed 58 large confiscated institutions. The debates about its management, particularly its subdivision concerned with selling, did not lead into questions about carrying out confiscations with the aim of an equitable redistribution of resources. This is despite the fact that the process of selling off [assets] benefitted major businessmen connected to the confiscated companies, given that in many cases, there was no competition when the companies were placed on the market.

It appears then that the state failed to manage the confiscated properties, and was more interested in selling off large companies for quick profits, while overlooking other confiscated companies. The administration of these companies is characterized by mass corruption, turning it into the country’s largest case of corruption since the revolution. At the same time, the Constitution’s neglect to insulate confiscation procedures from judicial dispute is a source of real danger to the confiscated assets, as those individuals whose items were confiscated are now attempting to recover them – raising questions about the future of the revolutionary decree.

Waiting for the Judiciary’s Ruling: The Legitimacy of the Revolutionary Confiscation Decree

We learned that a significant number of individuals whose assets were designated for confiscation have brought legal cases to the Administrative Court, challenging the legitimacy of the confiscation decree. A number of these cases will soon be forwarded to the Administrative Courts of First Instance. This prompted us to ask about the seriousness of the appeals, and whether the Administrative Court will actually rule on the legitimacy of the confiscation orders, or merely declare that it lacks the jurisdiction to do so.

We asked Emad Abdali about the facts of the cases and their prospective outcomes. He declined to reveal details, citing his work on behalf of the general authority for state disputes, which represents the state in cases relating to confiscation. However, he speculated that “the Administrative Court would not respond to the challenges to the confiscation order, as it was a legislative decree, which falls outside of the jurisdiction of the court”.

We posed the same question to Yussef al-Rizqi, a legal researcher and lawyer. He was of the opinion that “the confiscation decree was issued under the influence of public pressure, and did not include objective measures specifying what constituted the corrupt assets subject to confiscation. The decree was aimed at those who were close to the head of the former regime, rather than looking into financial corruption per se; it specified the date Ben Ali took power as the start of the confiscation of the assets he acquired, and suspicion of corruption of others affected by the decree is presumed to begin from the start of their relationship with the Ben Ali regime”.

Al-Rizqi also pointed out that “the confiscation decree does not comply with the United Nations Convention against Corruption (UNCAC), as it does not respect the most important of the convention’s conditions – which states that assets [targeted] be the result of corruption, and not the result of a person’s ordinary, natural actions”. He confirmed that “the decree can be considered flawed because of the fact that it did not refer the matter of verifying whether or not the assets had been legitimately obtained to the judiciary, which makes the text [of the decree] an infringement upon the right to property ownership”. He added, “that it is possible to compare the confiscation decree to the 1959 law on confiscation to illustrate its faults. The 1959 law specified an Administrative Commission to calculate the assets and take inventory of them, limiting their roles to these tasks alone, and allowed judicial challenges to decrees of confiscation.[4] Consequently, its statutes constituted sound legal procedures that respected the principle of the right to appeal, and established the soundness of the source of assets whose confiscation was sought. The new confiscation decree was not in compliance with these matters”.

Al-Rizqi concluded by stating “that the confiscation decree came to serve the interests of those who put it into place –the head of the government and the then-president of the republic, both of whom were emblematic of the old regime– and with them, entities which were in control and governing at that point in time. Consequently, the text of the decree should not be read at face value, and is far from serving the interests of the Tunisian people; it was not intended to fulfill the goals of the revolution”. For those reasons, al-Rizki concluded our discussion by saying that “the fortunes of those who have brought legal cases to lift the confiscation orders are ample enough to restore the assets”.

In conclusion, the process and procedures of confiscation have turned into a portfolio of “shifting sands”; and, everyone we talked to agreed that it included corruption – although they differed in how they defined the form and extent of that corruption. Some, who asked not to be named, pointed to suspicions surrounding the transformation of the confiscated assets into a cash cow for the political class, as well as for the well-connected, influential individuals with connections to that class – who have been provided with whitewashed assets in exchange for their silence on their corrupt origins. Thus, confiscation has transformed from a revolutionary event to a portfolio of corruption; what we have managed to discover and publish here is only the tip of the iceberg.

This article is an edited translation from Arabic.

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[1] The first section of decree-law no. 2011-13 dated to March 14, 2011 states: “Confiscate on behalf of the Tunisian State in accordance with the conditions stipulated by this decree and on the date of its issuance, all assets, movable, real estate, and rights acquired after November 7, 1987, and belonging to the former president of the Tunisian Republic Zine el Abidine Ben al Haj Hamda Ben Haj Hassan Ben Ali, and his wife Layla Bint Muhammad Ben Rahuma al-Tarabulsi, and the other individuals specified on the list attached to this decree, and others of whom it has been established that they attained their movable or real estate assets or rights due to their relationship with those people.”

[2] Judicial administrators control close to 80% of confiscated companies, i.e., around 400 companies, in addition to their management of all seized assets and estates. The remaining confiscated companies are overseen by state-appointed administrators under unclear criteria.

[3] The founding of Al Karama Holding Company was announced on July 26, 2012.
[4] Laws 136 and 137 of 1959 concerned the confiscation of real estate properties of a group of those close to the Beys, i.e. the Hussein family.

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