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.
As Ken Hurwtiz of the Open Society Justice Initiative explained here in February, the Justice Initiative has commissioned a series of papers on civil society and anticorruption litigation to, among other things, alert anticorruption activists and litigators in one country to legal developments in another they can adapt, if not borrow wholesale, for use in cases they are pursuing.
The second paper in the series, Arghya Sengupta’s “Anti-Corruption Litigation in the Supreme Court of India,” just released and now available on the JI web site, fills this bill admirably. As Sengupta, Founder and Research Director of the Vidhi Centre for Legal Policy in Delhi, explains, there is much in the Indian experience of value to lawyers in other nations. Since the late 1990s Indian courts have issued a series of extraordinary, precedent setting decisions to address the rampant corruption that infects India’s public sector. In response to cases brought by civil society, they have ordered law enforcement authorities to investigate grand corruption cases they had been ignoring, appointed civil society monitors to ensure the investigations are faithfully conducted, and invalidated executive actions tainted by corruption.
Sifting through the massive number of precedents to find ones useful elsewhere would be a daunting task for the non-Indian jurist or researcher. Sengupta’s paper makes it easy. He organizes the cases by theme and summarizes the holdings of the key decisions. He notes too where the courts’ decisions have had unintended effects and where critics argue that the cost of a court’s intervention may have exceeded the benefit. While litigators in other common law countries will find the paper an invaluable guide to cases they can lift directly, lawyers in civil law countries will be able to make great use of it as well, suggesting innovative arguments for a judicial solution to the chronic corruption problems affecting their nations.
As Courtney discussed in yesterday’s post, Peru’s presidential elections are scheduled for next month, and issues of corruption loom large in the public debate. The role of corruption in Peruvian politics is such a rich and complex topic, one about which I must confess I know very little. But one feature of the Peruvian election system, about which I was previously ignorant, caught my attention during conversations at a fascinating meeting in Lima last month (sponsored by the Peruvian Controller General’s Office): In Peru, voting is compulsory–there are penalties for failing to vote. Compulsory voting requirements, while not exactly common, are enforced in quite a few democracies, including (in addition to Peru) Argentina, Australia, Brazil, Cyprus, Ecuador, Liechtenstein, Luxembourg, Nauru, Singapore, and Uruguay. Some sub-national jurisdictions (such as the Indian state of Gujarat and the Swiss canton Schaffhausen) have compulsory voting, and there are also several countries that had compulsory voting at some point in their history, but have since abolished it (including, for example, Italy, the Netherlands, and Venezuela). In the United States, President Obama himself has suggested that the U.S. should consider some form of compulsory voting.
What does this have to do with corruption? Well, that’s actually the question I want to explore in this post. Although there’s a small political science literature on compulsory voting, there seems to be very little sustained discussion of the implications of compulsory voting for corruption control. (There is a bit, some of which I’ll mention below, but usually the mentions are brief and in passing.)
I’ll readily admit I don’t know much about this topic, but it seems to me an interesting question, and I can see a few arguments cutting both ways. So, without reaching any firm conclusions, let me first sketch out a few reasons why compulsory voting might reduce corruption, and then suggest a few reasons why compulsory voting might increase corruption. Continue reading
Dynastic politics are still strong across the globe. Hillary Clinton seems poised to follow in her husband’s footsteps and become President of the United States. Another Trudeau was elected Prime Minister of Canada last October. Chinese President Xi Jinping is a so-called “princeling.” And, as has been well documented on this blog, dynasties rule the political scene in the Philippines.
The front runner in Peru’s presidential election also has a familiar last name: Fujimori. Congresswoman Keiko Fujimori is the daughter of former president Alberto Fujimori, who held office from 1990 to 2000. Ex-President Fujimori’s regime did some good in Peru; for example, his liberal economic reforms helped to launch a period of economic growth. But his regime was also brutal and plagued by corruption. President Fujimori is in prison today, serving a 25 year sentence for human rights violations. He’s also been convicted of a number of corruption-related offenses, including using his spy chief to bribe journalists, business people, judges, and opposition politicians.
Despite this legacy of corruption, and the fact that Peruvians view corruption as one of the most serious problems facing the country, Congresswoman Fujimori sits atop the polls of the 2016 election. Is this a problem? How much should Peruvian voters consider Alberto Fujimori’s corruption and human rights abuses when they vote next month? And to what extent should the Fujimori family legacy affect their assessment of Congresswoman Fujimori’s approach to corruption?
Often in the anticorruption world we grapple with the question of how to deal with perpetually corrupt institutions. One example is the Philadelphia City Commission and its elected commissioners. In recent years, Anthony Clark, the Chair of the City Commission got paid despite not showing up to work, while other commissioners have engaged in overt patronage politics, such as doling out jobs to family members and steering city contracts to businesses and institutions run by family members (leading to the federal indictment of the daughter of the long-serving former Chair on corruption charges). And although credible voter fraud charges in Philadelphia are uncommon, the Commission has not done a particularly good job of administering elections, its primary job. For example, in 2012 more than 27,000 registered voters were somehow left out of the official polling books, and had to cast provisional ballots.
Things with the elected Philadelphia City Commissioners have gotten so bad that some (including the Committee of Seventy, a good governance group in Philadelphia, and the city’s two largest newspapers, the Philadelphia Inquirer and the Philadelphia Daily News) have called for abolishing the elected positions altogether. The Committee of Seventy has called for replacing the elected City Commissioners with an appointed board of professions to administer Philadelphia’s elections, although its plan is short on details.
This proposal relates to a larger issue with which anticorruption reformers in many jurisdictions struggle: which positions should be elected, and which should be appointed? When is democratic accountability the solution, and when is it the problem? There is no one right answer, of course—it all depends on context. Yet in the specific context of the Philadelphia City Commission, the instinct to eliminate the democratic process is premature for two reasons. Continue reading
GAB is delighted to welcome back Mat Tromme, Project Lead & Senior Research Fellow at the Bingham Centre for the Rule of Law, who (along with research assistant Domenico Vallario) contributes the following guest post:
Across Latin America, the past year has provided reasons for hope that the struggle against grand corruption and impunity is finally making progress. Prosecutors have gone after corrupt elites in Guatemala and Honduras, while political leaders in Mexico and Chile have also been under pressure for their links to corruption scandals. And in Brazil, the investigations into the corruption scandal at the state-owned oil giant Petrobras have led to charges against around 80 people, including high-ranking political figures like the speaker of the Lower Chamber and former President Collor de Mello, and a former treasurer of the ruling Worker’s Party.
The investigation into the Petrobras scandal is being led by Brazil’s Federal Police and by Public Ministry Prosecutor Deltan Dallagnol, under the watchful eye of Judge Sergio Moro. And Judge Moro’s tenacious attitude to pursuing graft stands in sharp contrast to a judicial system that has traditionally been slow and ineffective, especially in corruption cases: out of ten salient scandals between 1990 and 2010, 841 people were implicated, but only 55 were convicted. Yet Judge Moro’s approach may actually be emblematic of a broader shift in the Brazilian judiciary, as corruption cases that are tried in courts have been on the increase over the past few years.
On the face of it, these convictions should be welcomed as a sign that justice is meted out against the corrupt and that the judiciary is playing its part in tackling grand corruption. Yet some critics have raised legitimate concerns about the arguably overzealous approach the authorities (not only the legislature and the executive, but also the judiciary) have taken in tackling corruption, in light of rule of law and human rights commitments. Continue reading
Since last November Kenya has been rife with claims (here and here for press reports) that American shoemaker Nike bribed the nation’s track and field authority to ensure the country’s runners compete wearing Nike shoes. While Nike denies wrongdoing, the March 6 issue of the New York Times provides details which suggest the allegations are true. Yet despite the mounting evidence that an American company is at the center of a high profile corruption case in Kenya, the Times reports the U.S. has not opened an investigation. Its failure to do so, in the face of President Obama’s stern lecture about corruption to the Kenyan elite during his July 2015 visit to the country and the agreement reached during his visit pledging the U.S. to help Kenya fight corruption, has left Kenyans frustrated and angry at America. It is “hypocritical,” famed Kenyan corruption fighter John Githongo told the Times, for the American government to “bang on” about Kenya without investigating allegations against the iconic American company.
According to the Times, American officials believe the U.S. is powerless to investigate because, even if Nike did indeed pay a bribe, it was to employees of a private entity, and private sector bribery is not covered by the anti-bribery provisions of the Foreign Corrupt Practices Act. But while private sector bribery itself is not an FCPA offense, this does not mean Nike is off the hook. If an American company bribes an employee of a private entity, as it is alleged Nike has, it runs afoul of numerous state and federal statutes, anyone of which could provide the basis for launching an investigation. Four that come to mind immediately are: Continue reading
The U.S. Foreign Corrupt Practices Act (FCPA) prohibits the entities it covers from corruptly offering “anything of value” to a foreign official for the purposes of obtaining or retaining business. In most cases, the “thing of value” offered is a traditional bribe—money, expensive gifts, lavish vacations, etc. But in some cases, firms do “favors” for foreign officials that are less direct, and do not conform quite so obviously to traditional notion of bribery. Making a generous donations to the official’s favorite charity is one example; another, which has become increasingly prominent in recent FCPA investigations—primarily in cases involving China—is preferential hiring of the relatives of the foreign officials in exchange for business opportunities. This issue got a lot of press particularly in connection with the SEC’s investigation of hiring practices at JP Morgan and other investment banks in China, but the issue is more pervasive.
These investigations raised an interesting legal question: Can providing a job or internship to the adult relative of a foreign official ever count as providing “anything of value” to the official him- or herself? To my mind, the answer is a clear yes, but not everyone agrees. Last year, Professor Andy Spalding and I engaged in a spirited and constructive debate on this question (see here, here, here, and here)—and though I think in the end our positions (mostly) converged, there was perhaps still some lingering doubt (though not in my mind) as to whether the U.S. government would or should adopt the view that offering a bribe to an official’s relative can count as offering something of value to the official.
That doubt has been laid to rest. In the BNY Mellon settlement from last August, the settlement document explicitly endorsed the view that the firm’s decision to provide internships to foreign officials’ relatives counted as providing “anything of value,” because “[t]he internships were valuable work experience, and the requesting family members derived significant personal value in being able to confer this benefit on their family members.” And last week, the SEC announced a settlement with Qualcomm regarding investigations into Qualcomm’s alleged FCPA violations in China; although the violations included more traditional bribes (such as lavish gifts, travel, and entertainment), the settlement focuses substantially on Qualcomm’s practice of hiring the relatives of Chinese officials (and executives at state-owned enterprises, who count as foreign officials for FCPA purposes) in exchange for favorable treatment—even when these candidates would not meet Qualcomm’s normal hiring standards.
As GAB readers know, I think that this view is legally correct, good policy, and entirely consistent with the DOJ and SEC’s past statements on this issue, including the FCPA Resource Guide (which admittedly doesn’t discuss this specific scenario explicitly). The recent settlements in BNY Mellon and Qualcomm do not, of course, have any bearing on whether I’m correct in those views. But insofar as there might have been any uncertainty about the U.S. government’s position, it has been eliminated. This is likely bad news for J.P. Morgan, but good news for the world. Why do I think it’s good news for the world? Three main reasons: Continue reading
Corruption has yet again publicly surfaced as a significant problem at the United Nations. The current bribery scandal implicates John Ashe, the U.N. ambassador from Antigua and Barbuda and the former President of the General Assembly, along with several others. Ashe stands accused of accepting $1.3 million in bribes from Chinese developers in exchange for promoting real estate projects. Among the others who have come under scrutiny is Francis Lorenzo, the Dominican Republic’s deputy ambassador to the U.N., who allegedly accepted and paid bribes as a part of a scheme to influence decisions related to the development of a multi-billion dollar U.N. conference center in Macau.
As both Sarah and Matthew have previously discussed, the U.N. has not done an admirable job of policing itself. But now the organization may be getting help from the U.S. Attorney’s Office for the Southern District of New York. In October 2015, the FBI arrested Ashe and Lorenzo on charges of tax evasion and bribery, respectively. But the prosecution of officials of an international organization poses uncommon challenges. U.N. diplomats can claim certain immunity against suit in American courts, and both Ashe and Lorenzo plan to assert such immunity as a complete defense. U.S. Attorney Preet Bharara feels confident that he will be able to defeat these immunity claims, and he has further implied that he will be able to do so in future cases.
Is Bharara’s confidence well-founded? Any assessment of how American prosecutors (or other national prosecutions) may fight corruption at the U.N. requires delving into the complex legal doctrines on diplomatic immunities. This post aims to offer a brief primer on the key legal concepts and doctrines, and how they might apply in the Ashe and Lorenzo cases. Continue reading
Corruption in government procurement is a massive problem worldwide, especially in developing countries. In an ideal world, measures to combat procurement corruption would include structural changes that would open up monopolies, break cartels, and enact rational, uniform, and effective procurement laws. Sadly, the potential effectiveness of these measures is matched only by the near impossibility of their implementation any time soon. We should continue to push for comprehensive structural solutions to the procurement mess, of course. But in the meantime, are there other measures that can be implemented in countries struggling with widespread procurement corruption, which can at least help alleviate the problem?
One possible solution, heavily promoted by Transparency International (TI), is the use of so-called “Integrity Pacts” (IPs). An integrity pact is a voluntary agreement between a government agency and the bidders entering into a procurement contract, where both sides agree to refrain from corrupt practices. Bidders violating the pact could be blacklisted, placed under investigation, or have their contracts cancelled. Civil society actors monitor and arbitrate disputes in enforcement of IPs. The first IP was implemented in Ecuador for a refinery project in 1994; since then, TI has collaborated with government agencies to implement IPs in public contracts of more than 30 countries including Germany, Hungary, South Korea, Malaysia, Mexico, Argentina, Pakistan, China and India.
No one expects IPs to be a panacea—deeper structural reforms are still essential. But do IPs at least help? Or are they a distraction from more meaningful reforms? While a general answer may not be possible, we can learn from the past three decades of experience with IPs in different countries. One useful test case for the effectiveness of IPs is India. And the evidence is, on the whole, encouraging. Continue reading
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