Guest Post: Coronavirus and the Corruption Outbreak

Today’s guest post is from Sarah Steingrüber, an independent global health expert and Global Health Lead for CurbingCorruption.

It was never a question of if, but when, and now here we are. What’s worse is that we were warned. We are in the midst of a major global pandemic with nations all over the world declaring national emergencies, health systems struggling to cope or bracing themselves for the onslaught, and ordinary people trying to make sense of a barrage of sometimes conflicting information. The World Health Organization and national governments around the world recognize that slowing the spread of the coronavirus (more accurately, the SARS-CoV-2 virus) and helping those who are already suffering—both physically and economically—will require swift and bold action.

Unfortunately, that urgency significantly increases the risk that the response to the coronavirus pandemic will unleash a wave of corruption, one that not only threatens to undermine the effectiveness of the response thus ensuring greater loss of life, but could persist much longer than the outbreak itself, debilitating health systems long term.

In emergency situations, when lives are at stake, it is all too easy to rationalize the subordination of concerns about things like accountability and transparency, and to disregard or ignore any anticorruption infrastructure that may currently be in place. It’s hard to focus on holding leaders accountable when government action is desperately needed to save lives. But ignoring the risks of abuse of power during a crisis would be a grave mistake, and in the context of the current coronavirus pandemic, at least three such risks are especially serious:

  • The first and most immediate risk is the corrupt diversion or outright theft of the resources that are being allocated to fight the pandemic. Examples from Ebola outbreak responses give us some sense of the risks to expect. In the case of the 2013-2016 Ebola crisis in West Africa, after-the-fact audits conducted by donors and humanitarian organizations found numerous serious violations of procurement rules, fraudulent documentation, failure to pay healthcare workers’ salaries and outright embezzlement. From the Red Cross alone, 5% of total disbursements was lost. And just days ago, the former Minister of Health in the Democratic Republic of Congo, and his financial advisor, were sentenced to five years in prison for misuse of funds allocated for their Ebola response of which $400K was personally embezzled. That’s bad enough, but the problem is likely to be much greater in the case of the coronavirus. The 2013-2016 Ebola outbreak was mostly confined to three countries, and the standard treatment for Ebola mostly involves products that are included as part of standard essential medicines lists and readily available (for rehydration, pain management, and co-infection). SARS-CoV-2 is less deadly but more contagious than Ebola, and it has also spread to nearly every country in the world; already more people have died in a three month period than in the nearly four years of the Ebola outbreak. In addition to standard support, the management for severe cases of Covid-19, the advanced disease caused by the virus, requires intensive care units equipped with proper ventilators, and the personnel with the skills to operate them. It is projected that at least 1% of all cases will need ventilators, 2% intensive care and 5% hospitalization. On its own a standard ventilator costs at least US$25,000. Countries and even private individuals are now scrambling to acquire these machines cutting corners and in some cases ignoring standard procurement procedures.
  • A second corruption risk relates to the behavior of the private sector. For example, research institutes and pharmaceutical companies are moving fast to find a treatment or vaccine. Already, Gilead Sciences was granted FDA “orphaned drug status” for an experimental drug to treat Covid-19, a label that comes with market exclusivity, tax breaks, and the waiving of regulatory fees. The company has since rescinded the orphaned drug status following outcry. Under normal circumstances the business practices of this industry are suspect, and it should be expected that other private companies will use this opportunity to enrich themselves at the expense of the public interest.
  • The third corruption risk is less direct but no less important. While responding to this sort of public health emergency may require governments to make use of extraordinary powers, we must be vigilant against the possibility that corrupt leaders will use this emergency as a pretext to eliminate potential checks on their power and undermine institutions that might hold them accountable. There are signs that this has already started to happen. Hungarian Prime Minister Viktor Orbán, for example, succeeded in pushing legislation through that appoints him to oversee the outbreak response and declares an indefinite state of emergency that can be revoked by parliament of which Orbán’s party constitutes two thirds; this has been described as an attempt at establishing an outright dictatorship. And Israeli Prime Minister Binyamin Netanyahu, whose position is currently precarious due to pending corruption cases against him, has used the opportunity to incapacitate the Israeli parliament and the courts, which were supposed to start his corruption trial this month.

We are indeed facing a global heath emergency the likes of which we haven’t seen in a century. But the future integrity of our institutions cannot be sacrificed on the altar of swift response. Failure to buttress anticorruption institutions, civil society organizations, and anticorruption enforcement mechanisms guarantees further loss of life, depreciation in public trust, and dysfunction in society—dysfunction that will persist much longer than the crisis itself. We in the anticorruption community must raise our collective voices to ensure that our agenda is not ignored.

4 thoughts on “Guest Post: Coronavirus and the Corruption Outbreak

  1. Thank you for this post – I found your explanation of the corruption dangers presented by a health crisis very informative.

    What proposals, if any, do you recommend to prevent or at least mitigate the concerns that you discuss? In particular, how should governments respond to potential suspect (or even outright criminal) conduct by private entities who exploit the current crisis. On a criminal level, directing prosecutorial resources towards COVID-related malfeasance is relatively simple; Attorney General Barr has directed DOJ employees to prioritize any fraud or price-gouging relating to the crisis and many state AGs have joined him.

    But how should regulatory agencies approach the rush to bring vaccines or other drugs to market while still maintaining diligent oversight over companies like Gilead? Also, should tax and financial agencies give financial incentives to companies in order to facilitate the sprint of promising medicines to market?

  2. Thank you for this post, I also found it to be thought-provoking and important. Like Eric, I am interested in the responses that you would recommend, particularly in response to government seizure of power. It seems that government undermining of institutions is likely to have particularly damaging long-lasting ramifications. At the same time, given the extraordinary nature of the crisis, some significant exercises of government power seem to be accepted and warranted, even in democratic countries.

    I am curious what you consider to be the line in the sand for government behavior. Orbán’s seizure seems to be a clearly excessive and egregious measure and, given his long-standing authoritarian tendencies and the political makeup of the legislature, ripe for future exploitation. Netanyahu’s case seems more borderline–certainly he benefits from the current situation, but closing courts during the pandemic is hardly unprecedented, and it seems unlikely that his political opposition will allow his trial to be delayed longer than necessary.

    Certainly both cases will deserve scrutiny moving forward, but I am interested to know if there are any government steps that you would consider inherently beyond the pale or particularly indicative of a desire to undermine democratic institutions in the long run.

  3. Thank you for this very informative post.

    Echoing Eric and Maura, I would be curious in your recommendations for preventing corruption related to the pandemic, particularly with regard to the development of treatment drugs and medical supply procurement processes. Aside from after-the-fact prosecution, what government measures would you recommend to avoid private sector enrichment at the cost of public health? In the U.S., states are competing against each other for ventilators and PPE – the solution to that might be to nationalize the procurement process, but would you be concerned that such a strategy might lead to even greater corruption in light of the third risk you outline?

    Also, of the three corruption risks, do you find a breakdown among democracies and authoritarian countries as to which is the most prevalent depending on the type of government? Or is strength of government institutions (whether democratic or authoritarian) a better indicator of vulnerability for any or all of these specific risks?

  4. Thank you for this post and underlining the importance of anticorruption safeguards in making sure the negative effects of the coronavirus aren’t amplified, especially for the most vulnerable. As others highlighted, I am interested in your views about proactive steps that can be effective but still realistic at this time. I would also like to know how you feel about changing aid norms due to such an unprecedented crisis. For example, you mentioned that the theft of resources or diversion of funds has been a problem in past public health crises. Would you advocate for donor countries or agencies to withhold that valuable aid or perhaps give it directly to hospitals or even reputable NGOs, instead of recipient governments? I know these normative shifts are controversial but do you see them as potential solutions in this case? Additionally, President Trump just demoted Pentagon Inspector General Glenn Fine, essentially disqualifying him from chairing the panel of watchdogs who were to oversee the $2 trillion dollar stimulus package. Instead President Trump has nominated one of his own lawyers, Brian Miller, to serve as the special inspector general. While this is a more specific concerning case, how do you think congress could mitigate the negative effects of this current move and guard against a similar action by another president in the future?

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