Guest Post: Settlements in Asset Recovery Cases—Neither Ethical Nor Effective

Robert Packer, a Masters student at of the University of Nanterre, Paris, contributes the following guest post:

When governments attempt to freeze, seize, and repatriate the assets stolen by corrupt government officials and others, they often confront what is sometimes presented as a conflict between pragmatism and principles. Given that kleptocrats can often hire the best lawyers and take advantage of every legal protection available, attempting to secure convictions and/or confiscation of all ill-gotten assets may be an expensive, time-consuming, and uncertain prospect. As such, across multiple jurisdictions, cases like the Giffen Affair (Kazakhstan) and the Abacha Affair (Nigeria) have ended up with kleptocrats forfeiting a part of their assets and accepting a slap on the wrist—what Mohammed Moussa, in his post last April , referred to as a “golden handshake.” Proponents of such settlements argue that it’s preferable to secure the restitution of a part of the stolen assets rather than risk a long and expensive process resulting in nothing. Those taking this view assert that settlements are better for the victims, and point to the failed case against the Moi regime in Kenya as an example of the risks of pursuing an uncompromising approach. And there’s a certain logic to that view. Asset recovery practitioners and proponents might well ask ourselves, who are we to push for a conviction or for forfeiture of all illicit assets for the sake of some high vaunted principles (if not our own egos!) if this means that the poor (almost always the victims of corruption) are left with nothing?

That pro-settlement view may sound plausible, high-minded, and sophisticated. But it’s wrong. And no case better illustrates this than the Obiang affair, which is currently at various stages of development in France, the US, and Spain. That case nicely illustrates the serious problems with negotiating “golden handshake” settlements with kleptocrats and their cronies, rather than pushing to do full justice. Continue reading

Corruption Could Kill the Elephants–It’s Time to Ban All Ivory Trade Now

The ivory trade is spiraling out of control, accelerating very quickly in the past five years especially. A new study estimates that 100,000 elephants were killed in 2010, 2011, and 2012. With only about 400,000 elephants left, conservationists believe African elephants could be extinct in the wild within the decade. Unfortunately, this is a problem with no clear solutions, not least because corruption enables every aspect of the ivory trade. Inadequate enforcement of already-leaky laws has contributed to a situation wherein organized criminals collaborate with government officials to supply illegal ivory that is now worth more than its weight in gold.

Some have suggested that the ivory trade should be opened up and regulated, allowing governments to levy taxes to pay for increased enforcement and conservation. Most who have studied the issue conclude that this idea is madness — rampant corruption at every link in the supply chain means that illegal ivory would have no trouble working its way into the legal markets. The presence of a legal market, with legitimate supply channels, would merely accelerate the elephants’ demise.

What is needed instead is a renewal of the bans on ivory trading that were set in the late 1980s, the last time the ivory trade threatened the elephants’ existence so dramatically. Of course, corruption can undermine a ban as well. Nonetheless, a reinvigorated ban regime would be an important step forward, and seeking it is thus a worthy goal. Continue reading

More on International Principles for Anticorrution Agencies: A Cautionary Example from Human Rights?

In my last post, I raised questions about the 2012 Jakarta Statement on Principles for Anticorruption Agencies (ACAs). My main concerns were (1) that many of the principles were framed in such open-ended and flexible terms that they failed to really commit to anything in particular; (2) that a number of the principles that do endorse concrete criteria are questionable on substantive grounds; and (3) the statement failed to acknowledge or address a key tension between its calls for more mechanisms to promote ACA independence and its call (in more general terms) for mechanisms to preserve accountability and prevent ACAs from abusing their power. Here I want to follow up on the first concern, and highlight recent research on the effect of the 1991 Paris Principles on the Design of National Human Rights Institutions (NHRIs).

The comparison between the Jakarta Statement and the Paris Principles is apt. Samuel De Jaegere, a UN official and one of the main proponents and advocates of the Jakarta Statement, published a 2012 article outlining principles for anticorruption agencies, which the Jakarta Statement itself tracks closely, though not precisely. (I am not sure whether De Jaegere’s paper formed the basis of the Jakarta Statement, or whether both the paper and the Statement were the result of ongoing behind-the-scenes discussion and dialogue, but they are clearly related.) De Jaegare’s article specifically references the Paris Principles for NHRIs as a model that ACAs could follow, and goes so far as to suggest that the voluntary “accreditation” system that the International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights (ICC) has created for NHRIs (in which letter grades are assigned based on the degree of compliance with the Paris Principles) could be emulated for ACAs. As De Jaegere puts it, “The main lesson learnt from NHRIs for ACAs is: a set of principles and a monitoring mechanism may strengthen the independence, effectiveness and success of ACAs.”

That sounds appealing, but recent empirical research on the actual impact of the Paris Principles should give us pause. That research, by Katerina Linos of Berkeley Law School and Tom Pegram of University College London, suggests that while the Paris Principles appears to have succeeded in promoting adherence to the Principles’ fixed terms (in both democratic and authoritarian states), the results were quite different for those Principles framed in more flexible, open-ended terms: For those provisions, implementation generally did not improve, and in authoritarian states adherence to those Principles articulated in flexible language sometimes actually worsened. Linos and Pegram speculate, plausibly in my view, that states responded strategically to the Paris Principles, redirecting their efforts toward tasks that were specified in firm, precise, unconditional language (where there would be less room for dispute about compliance), and away from the more amorphous, open-ended tasks.

Linos and Pegram’s paper is clever, in part because they have found (or believe they have found) a clever way around an inferential problem that ordinarily bedevils efforts to assess the impact of international agreements on state behavior. Their results, insofar as we believe that they are valid, may have important implications for how we think about attempts to emulate the approach to international assessment of NHRIs for ACAs. Let me say a few words about each. Continue reading

Tackling Grand Corruption: Guatemala’s Successful Experiment

As guest blogger Mathiew Tromme wrote last week, Guatemala appears to be on the cusp of a major political transformation as a result of recent revelations of high-level corruption.   Citizens once fearful of expressing discontent with their government have taken to the streets in massive numbers both in the capital and the provinces.  The Vice President and several ministers have been forced to resign, and the continued tenure of the President is now in doubt should he not consent to major changes in the way the nation is governed.

Much of the credit for the revelations sparking this transformation goes to a small agency little known outside Guatemala, an unusual hybrid domestic-international organization accountable to the U.N. Secretary General with a mission to investigate crimes committed by politically powerful Guatemalans.  Quite possibly the most innovative experiment in governance in modern times, it has the independent investigatory power of an international tribunal, but unlike other tribunals the prosecution and trial of its cases are the responsibility of the Guatemalan judiciary.  Its success in developing cases against senior military and civilian leaders, working with prosecutors to see charges are filed, and pushing the courts to decide the cases fairly has been nothing short of remarkable.  Other nations up against ingrained grand corruption would do well to consider establishing a similar entity. Continue reading

The Jakarta Statement on Principles for Anti-Corruption Agencies: A Critique

In response to one of my early posts (from over a year ago) on the problem of politicized anticorruption enforcement, Samuel De Jaegere of UN Office of Drugs & Crime (UNODC) helpful drew my attention to the Jakarta Statement on Principles for Anti-Corruption Agencies, a non-binding resolution promulgated by representatives of anticorruption agencies (ACAs) from around the world. The Statement was endorsed by the International Association of Anti-Corruption Authorities at its Panama meeting last year, and noted (though not explicitly endorsed) also by the United Nations Convention Against Corruption (UNCAC) States Parties in its most recent resolution on the prevention of corruption.

I’ll admit that although I’d heard references to the Jakarta Statement before, I’d never actually read it. Now I have. I’m not quite sure what to make of it. On the one hand, I recognize that this is a political document, rather than an analytical document, and perhaps as a political document it will achieve its intended purpose, and do some good in the world in the process. After all, an international manifesto that affirms the importance of preserving the independence and authority of anticorruption enforcement is likely valuable, and perhaps the Jakarta Statement will prove useful — or perhaps has already proved useful — for beleaguered anticorruption agencies and their supporters to defend against attacks and to build up legitimacy.

On the other hand, as an operational document and guide to institutional design, I have to say I found the Jakarta Statement to be mostly unhelpful and/or simplistic. I want to be cautious in how I phrase this, because I am sympathetic to and respectful of the motivation behind the Jakarta Statement, and I don’t have enough of a sense of the nuances of international politics and norm diffusion to be able to evaluate its actual impact on the world. But taking it on its own terms as a set of institutional principles and guidelines, I was disappointed. I think the international community can and should do better when outlining the basic principles and objectives for ACAs. In the spirit of playing Devil’s Advocate, in the hopes of stimulating some critical debate on this critical issue, let me lay out my critique of the Jakarta Statement as it currently stands: Continue reading

Anticorruption Co-opted: Problems with the Purported Polygamy-Corruption Connection

Whether or not a country’s culture can be blamed for causing corruption has come up on the blog before.  This question comes up in a great variety of contexts, but one that may be less familiar to many readers is the purported causal link between polygamy and corruption. Polygamy has been called a “breeding ground” for corruption, and blamed for the spread of corruption in, for example, South AfricaGhana, Nigeria, and South Sudan. But the empirical evidence to support this claim is very weak. Given that weakness, it’s somewhat puzzling why the claim has gotten so much traction in some quarters. This may be one of those cases where the alleged link between a cultural practice (here, polygamy) and corruption is motivated less by a concern about corruption, and more by objections to–and deep social clashes over–the cultural practice. Corruption, in other words, may be a stalking horse for other concerns. Continue reading

Guest Post–Reflections on the “Guatemalan Spring”

Mathieu Tromme, Senior Research Fellow at the Bingham Centre for the Rule of Law, contributes the following guest post:

Guatemala is in the midst of its worst political crisis in the two decades since the end of the country’s civil war in 1996. Weekly marches, sit-ins and demonstrations keep drawing tens of thousands to the streets, denouncing corruption and demanding the President’s resignation, as well as a purge of politics and the judiciary (among other things). The scope and size of the demonstrations has been something of a surprise, given that the Guatemalan public often seems uninterested in political affairs or reluctant to express dissent. Although the protests originated in the capital, they have now spread to the whole country, and brought lower and middle classes together. The main cause of this discontent? Public anger over a string of corruption scandals.

The demonstrations—which some believe are the start of a “Guatemalan Spring”— began this past April, when the Office of the Public Prosecutor against Impunity, together with the UN-backed International Commission against Impunity in Guatemala (CICIG in Spanish) published an investigative report linking fraud in the Customs Department to the Vice President’s Office. Specifically, Vice President Baldetti’s private secretary, Mr. Monzón Rojas, stands accused of being at the helm of a wide tax and customs fraud scheme known as La Linea (“the line”), which has defrauded the state of about US$120 million. Although Vice President Baldetti, tried to distance herself from her Secretary (who’s still on the run), mounting public and political pressure forced her to resign on May 8. In addition, there were further revelations that lawyers representing detainees in connection with La Linea attempted to bribe Chief Justices of the Supreme Court. And there were other scandals as well: the head of the Ministry of Energy and Mining lost his post over corruption charges, the Ministers of the Interior, Environment, and Energy resigned, and the President of the Central Bank and the head of the Guatemalan Institute of Social Security (who was formerly the President’s personal secretary) have been forced to resign after being accused of fraud and influence peddling.

Although there are many interesting aspects of these anticorruption protests, let me highlight what seem to me especially important features of both the protests and the underlying problems that triggered them—features which, though specific to Guatemala, may have broader implications for the fight against entrenched political corruption. Continue reading

TI Report on Anti-Bribery Compliance Programs in the Defense Industry: Some Quick Reactions

Last April Transparency International UK released a very interesting report on the quality of corporate anti-bribery compliance programs in the defense industry. (This was the second such report; the first was issued in 2015). The report evaluated the ethics and anti-bribery compliance programs of 163 defense companies along five dimensions (leadership & governance, risk management, policies & codes, training, personnel & helplines) using publicly available information, supplemented with additional internal information from 63 cooperating firms, and assigned each firm a letter grade (A-F). The most eye-catching result, and the one that has gotten the most attention in the press releases and reporting on the report, is how badly the defense industry seems to be doing overall on this issue: Of the 163 firms included in the review, there were 4 As, 23 Bs, 29 Cs, 31 Ds, 19 Es, and 57 Fs. Thus, fewer than 17% of the defense firms examined scored in the A or B range, while close to half (47%) received a failing grade of E or F.

That’s certainly a notable and important (and depressing) finding, but digging a bit deeper, there are a few other interesting features of the report that have gotten a bit less attention, and are worth highlighting. Continue reading

Two Questions for the Open Contracting Partnership

One of today’s more promising global anticorruption movements is The Open Contracting Partnership.  A venture that brings together organizations as different as the World Bank, the Philippines Government Procurement Policy Board, and Oxfam, its goal is to open government contracting to greater transparency and public participation.  As many studies show (click here, here, and here for recent examples), corruption infects all stages of the procurement process  — from skewing the specifications to favor a single firm to rigging the tendering process to rampant cheating in contract performance.  And as many of these same studies argue, less secrecy and more public involvement in the process is one way to curb it.

The Partnership has taken important steps towards realizing these objectives since its launch in October 2012.  It has developed global principles governing contract openness, created a standard format for reporting data on government contracts, collated information on open contracting in the award of natural resource concessions and land, assembled a quality staff and advisory board, and a fostered an enthusiastic global community of practice.

All this is not only welcome but laudable, and the organizers and supporters of the Partnership are to be congratulated for the initiative.  Now that the Partnership is firmly established, however, it is time to address two questions it has so far avoided. Continue reading

Anticorruption Bibliography–June 2015 Update

An updated version of my anticorruption bibliography is available from my faculty webpage. A direct link to the pdf of the full bibliography is here, and a list of the new sources added in this update is here. As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.