Automatic Government Retention of All Official Emails: An Easy Anticorruption Reform

Former Secretary of State and presidential hopeful Hillary Clinton is currently under fire from Republican opponents and transparency advocates for her (alleged) circumvention of Federal recordkeeping laws. While this particular scandal (or pseudo-scandal) may soon pass, as have numerous other such scandals, the anticorruption community should take this opportunity to voice its support for a badly-needed reform to recordkeeping laws, to ensure that official emails sent by people in a position of public trust should be immutably preserved.

It seems almost too obvious, but “lost” and “misplaced” emails are often a major impediment in corruption investigations. At least three ongoing corruption investigations are touched by email deletions, to say nothing of past investigations:

  1. New York Governor Andrew Cuomo instructed his government to begin purging un-archived emails after 90 days, even as controversy and a Federal investigation swirls around his dismantling of the Moreland Commission. (He has now altered his policy somewhat)
  2. A Federal investigation into hundreds of millions of procurement dollars spent by the Delaware River Port Authority (DRPA) has been dragging on for years, crippled in part by missing emails that were “compromised” before the DRPA could turn them over to the U.S. Attorney. The DRPA (partly overseen by New Jersey Governor Chris Christie whose own history with deleted communications is muddled) lost 18 months worth of emails received by a single key official during a key period of time, due to a “software malfunction” with their in-house email system. DRPA’s Inspector General has since resigned in frustration.
  3. In a glimmer of hope, although recently-resigned Oregon Governor John Kitzhaber instructed members of his government to delete emails ahead of an FBI and IRS corruption probe, they refused to do so.

This is an absurd state of affairs, and entirely unnecessary. There is absolutely no compelling reason to not automatically preserve every email sent and received by civil servants. This is 2015: it is literally more expensive to take the time to actively delete emails than it is to simply keep them. Either governments haven’t realized this yet, or their claim that emails should be deleted for the sake of “efficiency” is in fact a red herring. I suggest the latter. The continued absence of appropriate email preservation rules for public servants, which would be incredibly easy to implement, will continue to frustrate anticorruption efforts. Continue reading

Announcement: Upcoming Conference on Fighting Corruption in “Global Cities”

Though most academic and policy discussion about anticorruption tends to focus on national or international level initiatives, there have been a number of interesting developments in recent years at the sub-national level, particularly in large urban areas. Fortunately, the fight against corruption at the municipal level is finally getting some more attention. Those who are interested in this topic, particularly those in the New York City area, may be particularly interested in a conference next month, organized by the Center for the Advancement of Public Integrity (CAPI) at Columbia Law School, on “Global Cities: Joining Forces Against Corruption.”  The conference, which will feature a keynote address by Mexico City Mayor Miguel Angel Mancera and Athens Mayor Giorgos Kaminis, will (according to the official conference blurb) “bring together high-level integrity officials from cities worldwide to discuss the challenges of fighting municipal corruption, strategize, and share best practices.” The conference will be held from April 23-25 at Columbia Law School, and it is free and open to the public. You can find more information (and register online) here.

Is Going Local the Answer? OxFam America’s New Report: “To Fight Corruption, Localize Aid”

In a new report on U.S. foreign assistance, To Fight Corruption, Localize Aid, OxFam America urges radical changes in the way the United States helps developing nations combat corruption.  Providing funds to strengthen anticorruption agencies, write new laws, and other traditional “top-down, donor-driven methods of fighting corruption” have had little impact on corruption the American member of the international Oxfam confederation asserts.  U.S. aid should thus be redirected to “locally driven approaches” to fighting corruption.  By this the report means U.S. assistance would go directly to “local change agents” so that they could “tackle institutional challenges, including corruption, in their towns, cities, and countries.”

The rhetoric of a community-based, “bottom up” approach to fighting corruption has an appealing ring, and the report showcases successful efforts to combat corruption at the local level in Guatemala, Liberia, and the Philippines to support its claims.  But a closer reading of these stories, and of the report itself, shows that the rhetoric outstrips the reality.

Continue reading

Why Do People Care So Much About the Proposed FCPA Compliance Defense?

A while back I posted a commentary on the proposal to add a so-called “compliance defense” to liability under the Foreign Corrupt Practices Act (FCPA). My basic take was that despite all the attention and controversy surrounding this proposal, in fact it would not make very much difference in practice. Without rehashing all the arguments in detail, my reasoning was basically as follows: First, corporate defendants (the only ones who would benefit from a compliance defense) are so reluctant even to be indicted—independent of the likely outcome if a case were actually to go to trial—that the addition of a formal compliance defense to liability would not significantly alter the bargaining game between the government and the corporate defendant. Second, the government already takes compliance efforts into account at several other stages in the process (and believes it is doing so appropriately), so the addition of the formal defense wouldn’t have much of an effect on the government’s position in settlement negotiations (which, as Jordan emphasized in a post from a few months ago, is really where all the action is).

I recently had an opportunity to discuss my hypothesis that the compliance defense wouldn’t actually matter much at a Duke Law School conference, where a bunch of white collar crime and FCPA experts who know much more about this subject than I do—including Duke Law Professor Sam Buell and Richmond Law Professor (and occasional GAB contributor) Andrew Spalding—pushed back against my argument. Among their many cogent criticisms, I wanted to address one in particular: If an FCPA compliance defense would make as little practical difference as I suggest, then why do the interested parties seem to care so much about it? Why (Professor Buell asks) have the Chamber of Commerce and the defense bar made this such a high priority on their FCPA reform agenda? And why (Professor Spalding asks) is the DOJ so dead set against it?

These are fair questions. I don’t have good answers, but in the interest of moving the conversation forward, let me suggest a few possibilities—and maybe folks out there in the blogosphere can react or offer their own explanations. Continue reading

When Transparency Isn’t the Answer: Beneficial Ownership in High-End Real Estate

Earlier this month Transparency International UK published a report entitled “Corruption on Your Doorstep: How Corrupt Capital Is Used to Buy Property in the UK.” The Britain-specific recommendations are part of TI’s broader “Unmask the Corrupt” campaign, a call by TI, and echoed by others, to establish public registries of beneficial ownership. A similar call to unveil the individuals behind the shell corporations used to buy luxury condos in Manhattan garnered a lot of attention stateside during last month’s New York Times “Towers of Secrecy” series on the city’s high-end property market (see here, here, here, here, here, and here). The anticorruption rationale for mandating disclosure of real property beneficial ownership seems straightforward: As both the TI-UK report and the NYT series argue, buying real property in New York and London is an appealing way to launder stolen funds, because high-end real estate purchases allow a corrupt actor to inject millions of dollars into the legitimate market without having to deal with pesky anti-money laundering regulations, completing the purchases through shell companies that disguise the true beneficial owner. Requiring public disclosure of the beneficial owners of real property would in theory have two related benefits: First, requiring purchasers to reveal beneficial ownership information up front would dissuade some from using real property as a means of laundering money, and second, if law enforcement authorities have ready access to this information, it will make it easier to instigate and conduct investigations, as well as to seize assets later on.

Indeed, transparency in real property beneficial ownership seems like the kind of thing all anticorruption advocates should support, which is why it may seem a little counterintuitive when I say TI and others are taking the wrong tack. Pushing for central public registries of beneficial ownership of real property will not likely achieve the two objectives, and may have serious drawbacks. Here’s why: Continue reading

Gecko v. Crocodile, Round Three: Indonesia’s Ongoing Fight between the Police and the KPK

In recent years, Indonesia has made substantial progress in fighting corruption. Many observers, both inside and outside the country, attribute much of this success to Indonesia’s anticorruption commission, the KPK. Since its establishment in 2002, the KPK has imprisoned hundreds of tainted businessmen, politicians, and government officials. Thus, it is not surprising that the KPK has made many enemies who are continually trying to weaken, and even dissolve, the KPK as an institution. Some of the fiercest resistance to the KPK has come from the Indonesian National Police Force. Unfortunately, for six years now there has been a simmering conflict between the police and the KPK, which has occasionally erupted into dramatic confrontations. Although the KPK has generally prevailed in these conflicts, the most recent confrontation may be the most challenging yet. The history of this conflict suggests some possible lessons for how to manage the tensions that an aggressive anticorruption agency can sometimes produce. Continue reading

“The Global Movement Against Transnational Corruption” — Panel Discussion at Columbia Law School

Last month, the Columbia University Center for the Advancement of Public Integrity (CAPI)–a relatively new research and center headed by the superb Jennifer Rogers and Gabriel Kuris–organized a panel on “The Global Movement Against Transnational Corruption,” in collaboration with the Columbia Society of International Law. GAB was well-represented, as both Rick and I were able to appear, along with the distinguished attorney Steven Michaels of Debevoise & Plimpton, on a panel moderated by David Hawkes from the World Bank’s Integrity Vice Presidency. For those who are interested, a video of the event is here. A quick guide to the prepared remarks:

  • Rick discusses the rarely-appreciated good news about the significant progress that has been made in the fight against transnational corruption (3:55-18:20 on the video).
  • Mr. Michaels discusses the existing legal architecture for addressing transnational bribery, along with trends in enforcement and corporate compliance (19:00-34:15).
  • I discuss legal tools that developed countries and international organizations can use for taking or encouraging more aggressive action against bribe-taking public officials (37:15-55:30).

I’m grateful to CAPI and the Columbia Society for International Law for organizing this event, and I hope some readers out there may find the video of the discussion interesting.