New Podcast, Featuring Leonor Ortiz Monasterio and Miguel Meza

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, I interview Leonor Ortiz Monasterio and Miguel Meza of the Mexican civil society organization Mexicanos Contra Corrupcion y la Impunidad (MCCI) (“Mexicans Against Impunity and Corruption). They describe how MCCI works to fight corruption in Mexico, and critically evaluate the anticorruption efforts of Mexican President Andrés Manuel López Obrador (known as AMLO), who ran in large part on an anticorruption platform, but whose approach to anticorruption during his first year in office has been met with significant controversy.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Italy’s Mafia Corruption Laws Are Causing More Confusion than Clarity

Italy has a long history with organized crime, and that history has had a fundamental impact on the country’s experience with corruption. Italy has three traditional mafia associations (the Camorra of Campania, the ‘Ndrangheta of Calabria, and Sicily’s Cosa Nostra), along with a number of smaller groups. For decades, these groups have secured their power not only by exercising violence against local populations, but also by their ability to influence politicians. Historically, it has been common for politicians in mafia-dominated regions to engage directly with the criminal groups, for instance by exchanging lucrative public works contracts for vote mobilization (for example, see here and here).

In the 1980s and 1990s, following an explosion of mafia-related violence, the Italian government began to crack down on organized crime, and this crackdown included new measures that targeted the criminals’ political benefactors. In 1982, the parliament passed Article 416-bis c.p., which defined for the first time the crime of “mafia-type association” (associazione di tipo mafioso). With the passage of this law, anyone who was found to be a member of a mafia-type association could be punished with 10-15 years in prison. In order to be considered a mafia-type association, the group has to follow the mafia method—that is, the use of 1) the force of group intimidation; 2) subjugation; and 3) the code of silence (omertà)—to commit crimes. In recognition of the importance of political alliances for mafia crimes, the procurement of votes is explicitly mentioned in the law as a possible mafia activity. In 1992, the law was amended to more directly target mafiosi’s political allies by criminalizing a rather narrow set of corrupt relationships. In particular, the law specified that politicians who worked with mafia groups by exchanging vote procurement for money would be subject to 7-12 years imprisonment. This amendment (denoted 416-ter) was subsequently reformed in 2014 and again in May 2019, with the result that the culpable conduct for politicians was expanded to include the exchange of votes for money or other benefits. This change reflects the reality that politicians rarely give money directly to mafia contacts but are more likely to provide other benefits, such as securing government contracts or providing jobs.

However, this regime was deemed insufficient, as most government officials are not actually members of mafia groups, and there are many ways in which mafias may benefit officials that do not involve elections. For instance, one might imagine a magistrate who consistently provides favorable rulings for mafia defendants, or a police officer who provides information about ongoing investigations in exchange for money or other benefits. To address these gaps, Italian courts have developed the concept of concorso esterno (external participation). Concorso esterno is not a separate crime in the Italian criminal code, but rather a concept that courts have derived from the combination of Article 416-bis and Article 110 c.p., the provision that establishes that when more than one person is complicit in a crime, each is subject to the same punishment for that crime. Italian courts have reasoned that the conjunction of these two provisions implies that prosecutors may charge individuals who support mafia actors—including politicians and other government officials—almost as if they were mafiosi themselves, and those convicted may be subject to the harsh sentences that await convicted mafiosi.

The concorso esterno regime reduces the ability of corrupt officials to avoid prosecution, and empowers Italian law enforcement to target the political corruption that has undergirded mafia activity. Where the law is used effectively against high-level politicians, it may also help to combat the public perception that politicians who work with the mafia groups enjoy impunity. Moreover, by labeling politicians and other “non-mafia” criminal associates as functionally equivalent to mafiosi themselves, this approach sends a powerful symbolic message, one that is appropriate given the historic symbiosis between politicians and organized crime in Italy. Nevertheless, the concorso esterno theory, which has long been controversial in Italian legal scholarship (for example, see here and here), has some very real downsides.

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Don’t Believe the Spin on the Mozambican Acquittal

The jury in the federal criminal trial in Brooklyn of  Jean Boustani acquitted him December 2 of charges arising from a scheme to pay Mozambican officials tens of millions of dollars in bribes in return for the government borrowing hundreds of millions of dollars to pay for ships it could not afford. No sooner was the verdict announced than Privinvest — Boustani’s employer, the supplier of the ships, and a major beneficiary of the scheme — crowed it had been completely vindicated.  Despite evidence produced at the trial, charges pending in Mozambique, and allegations in a civil action in the United Kingdom, Privinvest lawyers are telling the press the acquittal proves the company had no part of the scheme.  That it did not pay bribes to win the business.

If it were true the company paid no bribes, three Credit Suisse executives would not have pled guilty to accepting bribes from it in the same court where Boustani was acquitted. Nor would they have named its CEO Iskander Safa, CFO Najib Allam, and Boustani as bribe payers (here). Nor would a trial witness have explained that Government Exhibit 2758, an April 2014 e-mail from Boustani to Allam, is a list of bribes the company paid Mozambican officials.  A list that includes President Filipe Jacinto Nyusi (“Nuy” in the e-mail), former Finance Minister Manuel Chang (“Chopstick”), and former intelligence chief António Carlos do Rosário (“Ros”). (Complete decoded list here.)

No, the verdict of acquittal does not exonerate Privinvest.  Nor anyone else for that matter.  What it shows is two things.

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If the International Community Takes Corruption in Sports Seriously, Russia Should Be Banned from the 2020 Olympics

Corruption in sports has been recognized as a serious and systemic problem (see here and here). One of the most egregious examples of sports-related corruption is Russia’s state-sponsored doping program. A 2015 report issued by an independent commission of the World Anti-Doping Agency found that this program involved athletes, coaches, trainers, doctors, and Russian institutions. Some of the most serious allegations were that members of the Russian secret service (the FSB) had pressured lab workers to cover up positive drug testing results (with one lab destroying more than 1,400 samples), top Russian sports officials submitting fake urine samples, and athletes assuming false identities, paying for destruction of positive doping results, and bribing anti-doping authorities. The former director of Russia’s anti-doping lab, Dr. Grigory Rodchenkov, has provided additional explanations as to how he and others, including FSB agents, enabled doping for the country’s athletes.

In light of these revelations, WADA recommended that the International Olympic Committee (IOC) ban Russia in the 2016 Rio Summer Olympics; however the IOC permitted each sport to consider individual athletes for participation. After an additional 2016 investigation known as the McLaren report produced additional evidence regarding Russian violations, the IOC did ban Russia from the 2018 Winter Olympics, and banned several individual athletes for life, but the IOC permitted 168 Russians to compete neutrally as “Olympic Athletes from Russia.” WADA reinstated Russia’s Anti-Doping Agency as compliant with the World Anti-Doping Code in September 2018, subject to two conditions: (1) Russian anti-doping authorities must accept the McLaren report findings; and (2) Russia must make data in its Moscow laboratory available to WADA inspection.

Yet Russia has not learned its lesson:

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New Podcast, Featuring Monika Bauhr

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, I interview Monika Bauhr, Associate Professor of Political Science and former head of the Quality of Government Institute at the University of Gothenburg. During our conversation, Professor Bauhr discusses her research work in three key areas: (1) the impact of pro-transparency reforms (particularly the adoption of freedom of information laws) on corruption; (2) the disaggregation of the broad category “corruption” into different types of corruption (such as “need” corruption versus “greed” corruption); and (3) the relationship between gender and corruption, in particular what factors might account for the apparent correlation between greater representation of women in elected office (or the business or political elite more generally) and lower (perceived) corruption levels.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Despite Predictions of Doom, McDonnell v. United States Has Not Derailed U.S. Anticorruption Prosecutions

In 2016, the U.S. Supreme Court decided a case called McDonnell v. United States, which unanimously vacated the corruption conviction of former Virginia governor Bob McDonnell. McDonnell, according to prosecutors, had accepted a variety of gifts and other benefits from a businessman in exchange for using his influence as governor to help that businessman obtain assistance from various state agencies. The federal statute at issue made it a crime for a public official to perform (or offer to perform) an “official act” in exchange for something of value. But the problem, as the Supreme Court saw it, was that the jury in McDonnell’s case was told an “official” act could include something like setting up a meeting, making an introduction, or speaking favorably about a project to the government official responsible for making the relevant decision. This understanding of “official act,” the Supreme Court said, was too broad. An “official act,” the Court held, involves “a formal exercise of governmental power,” and while this could include ordering or pressuring another official to take or refrain from some action, other activities, like “[s]etting up a meeting, talking to another official, or organizing an event—without more—does not fit that definition of ‘official act.’”

How big a deal was the McDonnell decision? In the immediate aftermath of the decision, many anticorruption activists decried the holding as permitting “[a]ctions by U.S. politicians that look wrong, smell wrong and raise profound ethical issues.” Indeed, many critics characterized the McDonnell decision as having effectively “legalized” all but the most egregious and clumsy forms of bribery (see, for example, here, here, here, and here.) However, as Professor Stephenson observed on this blog at the time, the McDonnell holding could be read more narrowly. The opinion did make prosecutors’ job somewhat more difficult in holding that merely setting up a meeting or speaking with subordinates would not, without more, count as “official acts,” but the opinion did not appear to rule out the possibility that an official act might include, for example, ordering or pressuring a subordinate to take some specific action on behalf of the bribe-payer. The jury instruction in McDonnell had been (in the Supreme Court’s view) overly broad, but most corruption prosecutions would probably still be able to proceed, so long as the jury was properly instructed. Professor Stephenson acknowledged at the time, though, that this “glass-half-full” view of McDonnell was only one possible reading, and that the decision might end up sweeping much more broadly in practice.

Now, over three years since McDonnell, what can we say about the decision’s impact? In the initial aftermath of the decision, it did indeed seem that McDonnell would prove a major impediment to corruption prosecutions. In the McDonnell case itself, the government decided not to retry McDonnell. This might be read as a tacit admission that under the Supreme Court’s newly-announced understanding of “official act,” the government probably wouldn’t be able to get a conviction. Furthermore, the decision was seen as triggering a string of significant defeats for public integrity prosecutors. For example: The government failed to obtain a guilty verdict against New Jersey Senator Robert Menendez on federal corruption charges (the trial ended in a hung jury, and the government subsequently dropped the case); a federal appeals court, citing McDonnell, vacated two hard-won guilty verdicts for corruption against the prominent New York politicians Sheldon Silver and Dean Skelos; and federal prosecutors in New York decided not to pursue charges after a long public corruption investigation into New York City Mayor Bill De Blasio, because of “the high burden of proof, the clarity of existing law” and the challenge of proving corruption without “evidence of personal profit.” The De Blasio case is especially pertinent given that two men, Harendra Singh and Jona S. Rechnitz, pled guilty to giving De Blasio’s campaign and Political Action Committee tens of thousands of dollars in return for the mayor helping them negotiate favorable settlements for businesses that owed the city millions in rent and property charges. Even with these two witnesses, prosecutors dropped the case because they appeared unsure Mayor De Blasio took an “official action” as defined in McDonnell.

But these initial indicators did not develop into a larger trend, and McDonnell has not turned out to be as much of an impediment to federal corruption prosecutions as some critics feared. Subsequent government prosecutions and court decisions have made this clear. Consider the following examples: Continue reading

Will the Swiss Condone Torture in the Rush to Return Assets to Uzbekistan?

Allegations of torture have dogged the planned return of stolen assets from Switzerland to Uzbekistan for years (here). In a recent interview, a cellmate of one of the alleged torture victims has given the claims new life.  And should give Swiss citizens and their government pause before proceeding with any return.

The assets to be returned are the several hundred million dollars in bribes paid to Gulnara Karimova for the grant of mobile phone licenses in Uzbekistan, something within her power as daughter of the country’s then president.  She stashed most of the money in Switzerland, and when the scheme was exposed, Swiss prosecutors promptly opened a money laundering case against Gulnara and her accomplices. From the outset, the Swiss government made it clear that, if and when defendants were found guilty, the laundered funds would be returned to Uzbekistan.

A breakthrough came in 2018 when Gayane Avakyan, one of Gulnara’s accomplices, signed a Swiss Summary Penalty Order confessing to her role in the money laundering scheme and giving up any claim to the laundered funds.  The order was signed while she was serving time in an Uzbekistan prison, and because of multiple, credible reports that torture is commonly practiced in Uzbek prisons, questions were immediately raised about whether torture or the threat of torture was used to get Avakyan to sign.  A prison cellmate now says she was in fact subjected to a particularly harsh form of torture while incarcerated. Continue reading