Monthly Archives: November 2015

Close But No CICIGar… Yet: Replicating Guatemala’s Anticorruption Success

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Guatemala’s international commission against impunity (known by its Spanish acronym, CICIG) played a pivotal role in answering widespread public demand this year for accountability for corruption in the government. CICIG’s investigations led to the resignations and arrests of top government officials—including the former president and vice president—following their involvement in a large-scale customs scandal. CICIG’s perceived success has let to calls in other countries for adopting (or adapting) the CICIG model elsewhere. For example, public outcry in Honduras over a healthcare scandal culminated in a proposal for a Honduran version of CICIG, to be led by the Organization of American States and formally titled the “Support Mission Against Corruption and Impunity in Honduras.” (Like CICIG, this body will also be known by its acronym in Spanish, MACCIH). There have also been calls to replicate CICIG in El Salvador (which thus far have led only to the continuation of a USAID-sponsored anticorruption initiative rather than creation of a full-fledged CICIG clone), most recently, in Venezuela.

These other governments, however, are resisting calls for full-fledged CICIG clones, and the existing or proposed institutions, like MACCIH in Honduras or the USAID initiative in El Salvador–have been met with skepticism. For example, many Honduran critics point to MACCIH’s limited mission as evidence of its limited effect. Indeed, many suspect that the Honduran government agreed to MACCIH precisely because its work is likely to be duplicative and ineffective, mainly focused on study and recommending improvements; the call for further study is seen, probably accurately, as a delaying tactic until the next election rather than a practical step forward. Anticorruption activists in Honduras have therefore introduced a bill that rejects MACCIH, calling it a governmental ploy to placate demand and avoid accountability, and requests a more CICIG-like body in its place.

To a certain extent, this skepticism is justified: both MACCIH and the Salvadoran USAID initiative are watered-down substitutes for CICIG at best. Nonetheless, the outlook may not be as bleak as it seems. CICIG may seem exemplary now, especially in comparison to MACCIH and the USAID initiative, but it was not always perceived this way. Many of the preconditions for CICIG’s recent success developed with its work over time. This is a cause for some optimism regarding the prospects for the “CICIG-lite” initiatives in El Salvador and Honduras, despite their limited mandate and powers. Nonetheless, certain structural problems–mainly related to funding and independence–are more worrisome. Continue reading →

NYU Roundtable on the DOJ Fraud Section’s New “Corporate Compliance Counsel”: The Video and Some Thoughts

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As many readers are likely aware, the U.S. Department of Justice Fraud Section (now headed by Andrew Weissmann), which has responsibility for enforcing the Foreign Corrupt Practices Act (among other things), recently created a new position called the “Corporate Compliance Counsel,” and appointed to the post Hui Chen, a former corporate compliance officer for a number of major firms (including Microsoft, Pfizer, and Standard Chartered). The avowed purpose of the new position is to assist the DOJ in assessing the quality of a company’s internal compliance program and remediation measures. In the FCPA context (and others), these assessments are relevant to the DOJ’s decisions regarding whether to prosecute, what penalties to seek, and what additional remedial measures to pursue, even though there is not a formal “compliance defense” under the FCPA (or other statutes that the Section enforces). Thus, the thinking behind the creation of the new DOJ position seems to be that having someone in the Section with a lot of background in corporate compliance will enable the DOJ prosecutors to do a better job in evaluating the quality of a company’s compliance program and remedial efforts.

The creation of the Corporate Compliance Counsel position has garnered praise in some quarters, but also attracted some criticism; the critics tend to argue that the creation of the new position is, at best, a public relations move with little real consequence, and at worst an indirect effort to weaken the enforcement of corporate criminal laws.

Last week, the NYU Program on Corporate Compliance and Enforcement (PCCE) hosted a public forum where Mr. Weissmann and Ms. Chen discussed the new position and answered some questions posed by NYU Professor (and PCCE co-director) Jennifer Arlen. Because I thought that this might be of interest to some readers, here’s a link to a video of the discussion.

A few additional thoughts about what I thought were the more interesting exchanges: Continue reading →

A Trade-Anticorruption Breakthrough?: The Trans-Pacific Partnership’s Transparency and Anticorruption Chapter

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The full text of the Trans-Pacific Partnership (TPP), released earlier this month, is already generating plenty of discussion. One of the proposed agreement’s most striking features is the full chapter on transparency and anticorruption, Chapter 26. The U.S. Trade Representative (USTR) had earlier stated that its objectives in negotiating the TPP included addressing transparency, accountability, and corruption; at the time I thought this was simply a negotiating ploy or marketing strategy, but it looks like I was wrong. As USTR’s summary of the “good governance” steps of Chapter 26 correctly notes, the TPP “includes the strongest anti-corruption and transparency standards of any trade agreement.” Indeed, Chapter 26–which appears to modeled in part on draft language that Transparency International had proposed for inclusion in a different trade deal, the Transatlantic Trade and Investment Partnership–could mark an important and unprecedented step towards using trade agreements to promoting and harmonize international anticorruption efforts.

Here are a few points that are or could be particularly important features of Chapter 26:

Continue reading →

The Challenge of Police Reform in Developing Nations

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A new volume from CRC press, Police Corruption and Police Reforms in Developing Societies, provides an informative if frustrating look at efforts to combat corruption in the police services of developing countries.  Informative for two reasons: one, because editor Kempe Ronald Hope marshals such powerful evidence in his introduction for the primacy of tackling corruption in the police.  Two, because the authors he has assembled offer such authoritative, in-depth studies of how police corruption has been attacked in eight developing states spread across Africa, the Asia-Pacific region, and Latin America and the Caribbean plus Hong Kong.  Policymakers in developing states no longer have any excuse for not prioritizing police anticorruption reforms.  Nor can they plead ignorance of the ingredients required.

But a list of ingredients does not itself make a stew.  That takes a recipe for how to combine the ingredients: in what proportions and when.  And that is one reason why the volume is so frustrating. It lacks a recipe for police reform. Continue reading →

Guest Post: Spend Anticorruption Resources on Professional Training, Not Postgraduate Education

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Alan Doig, Professor at Newcastle Business School, Northumbria University, contributes the following guest post:

Resources for anticorruption are scare; how should they be spent? In particular, how should the international community (national aid agencies, international institutions, and private donors and foundations) allocate resources for education and training programs for anticorruption professionals?

Although “education” and “training” are often lumped together as one category, in fact they are quite different. Education is about the acquisition of knowledge, with the accompanying change in awareness and understanding, through the provision and assimilation of information. Training involves the acquisition of the applied knowledge and technical skills required to improve individual and organizational performance in the workplace, invariably in relation to specific roles or functions. In terms of impact, education would look for longer-term benefits and impact while training can be judged more immediately by what the person does once trained.

The question of how to spend the even more limited funds that are not tied to the big spenders (the multilateral and bilateral donors) brings this issue into sharp focus, and raises the question of whether too much too much is allocated to postgraduate anticorruption education, at the expense of practical anticorruption training. Continue reading →

The Corruption Is Too Damn High: Reforming Albany by Creating Additional Parties

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New York state politics appears to be rife with systematic corruption, a truth underscored by the fact that two of New York’s most powerful politicians—Former Assembly Speaker Sheldon Silver and former State Senate Majority Leader Dean G. Skelos–will soon be headed to trial for corruption. What can be done about this? Federal government involvement may do some good, as the federal prosecutions of Silver and Skelos demonstrate; U.S. Attorney Preet Bharara is conducting many other investigations that have sent a chill of fear through Albany’s corrupt actors. Yet the threat of prosecution alone might not be enough, which as led many people, including contributors to this blog, to suggest a range of other reforms designed to reduce the motive or opportunity for New York state politicians to exploit their power for private gain. Such proposals include reducing or eliminating the ability of legislators to receive outside income, pinpointing the problem that Albany is far removed from the cultural and business heart of New York, and introducing term limits for state legislators.

Yet there is another reform possibility that has not been discussed much and might be more practical than it initially seems: activists devoted to fighting corruption could create an additional political party in effectively one-party districts. There are many political activists in New York who care deeply about good governance. For example, State Senator Liz Krueger started a “No Bad Apples” PAC to “recruit, train and support progressive, reform-minded candidates for the New York State Senate.” Enthusiasm and resources that now go to efforts like that within one of the two major parties could instead be channeled to the creation of “No Bad Apples”-type parties in one-party districts. It would make sense for progressive activists to create spin-off parties to contest safe Democratic seats and conservative activists to create spin-off parties to contest safe Republican ones.

Continue reading →

Political Finance Regulation and Perceived Corruption: Some Preliminary Exploration

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Corruption is closely linked to problems associated with money in politics. Indeed, some have argued that an excessive/inappropriate influence of money on elections is corruption (even if it’s not necessarily illegal or currently viewed as unethical). Even for those who (like me) prefer a more restrictive definition of “corruption,” it is widely believed that these issues are related. Many hypothesize that countries with weak or ineffective systems of political finance regulation may experience higher levels of corruption—though at the same time excessively onerous, unrealistic regulations on political spending may also induce corruption in order to circumvent the official rules. Perhaps surprisingly, though, we do not have (or at least I have not yet seen) very much quantitative, comparative research on the relationship between the quality of countries’ laws on the regulation of political finance, on the one hand, and the extent of their corruption problems, on the other.

This may be starting to change, thanks in part to initiatives like the Money, Politics and Transparency (MPT) forum (a collaborative venture of the Sunlight Foundation, Global Integrity, and the Electoral Integrity Project). A few weeks back Rick posted a highly critical assessment of MPT’s volume Checkbook Elections, a collection of qualitative case studies. I haven’t yet read that report, but here I wanted to focus on another aspect of MPT’s work: a quantitative index that purports to measure how well 54 different democratic countries regulate political finance, based on responses to 50 survey questions in five different categories (public funding of elections, contribution and expenditure restrictions, reporting and disclosure, regulation of third-party actors, and monitoring/enforcement). The surveys include questions about both law and practice in all five categories; moreover, in addition to a composite index score, MPT also provides separate scores for the quality of electoral regulation both “in law” and “in practice.” (A detailed description of the methodology is available here.) All the usual caveats and concerns regarding these sorts of composite indexes of course apply here, but at first pass this seems like a useful resource, and potentially helpful in teasing out the relationships between political finance regulation and corruption more generally.

Real progress on this will front require careful research design, more extensive data, and the application of rigorous empirical methods—an enterprise for which I lack both the time and the talent. But just for fun, I played around a bit to see how the MPT index (and each sub-index) correlates with the 2014 Transparency International Corruption Perceptions Index (CPI). Are countries with better regulation of political finance (in law, in practice, or overall) perceived as more corrupt? Less corrupt? I’ll tell you what I found after the break, but just for fun take a guess now, before you know the answer!

OK, here’s what I found: Continue reading →

Not Corrupt, Not a Thief, But Not the Answer: Jimmy Morales and Corruption in Guatemala

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Last month, Guatemalans went to the presidential runoff polls and elected former comedian Jimmy Morales in a landslide over former first lady Sandra Torres. Morales ran as an anticorruption candidate; his slogan, “not corrupt, not a thief,” says it all. Not being a thief might seem like a low bar for a presidential candidate, but Morales’s election shows that such qualifications are apparently and alarmingly sufficient in Guatemala. Despite never having held public office or having been involved much in politics as a private citizen (unless racism and cultural insensitivity count), Morales was a well-known and available outsider in the right place at the right time. Indeed, Morales seems to have gotten elected not despite but rather because of his lack of experience and prior political involvement—characteristics that were valuable assets against the backdrop of widespread public outcry against corruption in Guatemala over the last several months, culminating in the resignations and arrests of President Otto Perez Molina and Vice President Roxana Baldetti in September.

Many hail Morales’s victory as an indication that the anticorruption movement reached a tipping point and created change in Guatemala. But there are at least three reasons to worry that far from an anticorruption success, electing Morales may be a setback or at least a non-event for anti-corruption and democracy in Guatemala. Continue reading →

How Corruption Politics Facilitated Hungary’s Response to the Refugee Crisis

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Politicians using xenophobia as a tool for their political benefit is unfortunately common; the past few years have seen populist, far-right parties across Europe take stances that involve stirring nationalist sentiments by portraying their countries as figuratively—and, in their eyes, sometimes literally—under attack by foreigners who have come to reside there. Still, even as those parties’ popularity increases, they have largely not yet succeeded in taking full control of government. Not so in Hungary, where Prime Minister Victor Orbán’s centralist, ultra-nationalist variant on the theme holds sway, and where the country’s escalating efforts to “keep Europe Christian” by excluding Syrian refugees (as well as many other predominantly Muslim migrants and refugees) are extreme even compared to its neighbors.

The reasons for Orbán’s rise to and maintain power are numerous and complex. What has largely gone overlooked in media reports so far, however, is the important role that corruption has played, first in helping Orbán to the premiership, and then in influencing his anti-refugee/migrant policy.

Continue reading →

Anticorruption Bibliography–November 2015 Update

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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.