The Man Who Follows the Money

Jeffrey Gedmin: Asset recovery is now a growth industry. How do we find ourselves in a situation in which massive amounts of money are stolen and misappropriated on a global scale?

Udi Levy: Asset recovery has become one of the biggest industries because of the dramatic increase in corruption—and, more generally, the decline in moral values. Today’s corruption affects not just African and Arab dictatorships but democratic countries. In the last decade, we’ve seen a number of investigations of Western leaders like Trump, Sarkozy, and Netanyahu because we live in a world with huge temptations and, it seems, less and less restraint.

JG: Can you say a little about how governments, law enforcement, and private intelligence firms work together to apprehend culprits and retrieve stolen funds?

UL: When democratic leaders become part of the corrupted world, they have less incentive to fight corruption and less interest in doing so. Regulators and law enforcement agencies try their best; but if they don’t have government’s full support, it is exceptionally difficult to conduct transnational investigations of financial crimes. We see real government willingness to recover money only when there’s pressure from international institutions, as in Ukraine and Lebanon when the World Bank conditioned financial support on asset recovery and fighting corruption. In cases like that, private firms and NGOs can be effective tools of transnational investigations.

JG: Is kleptocracy now a strategic and national security issue? If the Biden Administration convenes a democracy summit this fall, should combating kleptocracy be on the agenda?

UL: Kleptocracy is indeed a national security issue. First, it undermines democratic values: Instead of making the world a better place, we devolve into a kind of anarchy. Second, regulatory weakness creates instability: The Arab world and even today’s Israel are good examples. Third, kleptocracy causes huge economic damage. Especially with the terrifying economic situation brought about by covid-19, asset recovery—bringing back trillions of dollars to help global economic recovery—is one solution.

JG: What reforms do we need in the West to make it harder for authoritarian regimes to steal and conceal wealth? Do banking and real estate law have to address enablers?

UL: We need transparency and punishment—transparency in banking systems and data about assets; and punishment, meaning penalties against bankers and those who help criminals hide their assets. There needs to be more cooperation about disclosure among entities and jurisdictions around the world. It’s not just governments: Google and Facebook have big jobs to do.

JG: How important is human intelligence in this area, compared to technology? How do you investigate and “crack”cases?

UL: Synergy between people from the intelligence and financial worlds is essential. We have to understand that hiding money is not done exclusively by “bad guys.” When you understand the methods, you can see links among terrorists, organized crime, money laundering, and even espionage. Once you understand the methods, you can use the pieces of information from your investigations to put the puzzle together.

JG: Why does Israeli intelligence of all types attract so much attention in popular imagination around the world—even television series like “Fauda” and “Teheran?” Do Israelis simply do certain things better?

UL: Israel leads the world in intelligence for two reasons. First, Israelis’ main goal is to survive. When you wake up in the morning and go to sleep at night with that feeling, it pushes you to be more creative and, I suppose, more deceptive. The second reason is the army. When you put eighteen-year-olds together under pressure in a kind of incubator and teach them to identify creative solutions to national security issues, you produce unique and clever people.

Udi Levy is chairman of E2R Group, a leading Israeli investigations firm that specializes in asset tracing, financial investigations, and intelligence. For nearly thirty years he was a senior intelligence officer in the Israel Defense Forces (IDF), where he established and led the Mossad’s Asset Tracing Unit related to terrorist financing. He has also served Israel’s prime minister as IDF counterterrorism advisor and special advisor on economic warfare.

Jeffrey Gedmin is co-founder and editor-in-chief of American Purpose.