Monthly Archives: September 2020

President Theodore Roosevelt on the Importance of Fighting Corruption

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Last week, I posted some information about a new working paper that I jointly authored with Justice Mariano-Florentino Cuellar on anticorruption reform in the United States over the 1865-1941 period. Although one of our main arguments in that paper is that the process of anticorruption reform in the United States was long, slow, and involved many different actors at all levels (in contrast to the image of the “big bang” reform driven by a single powerful figure, like a Lee Kwan Yew or a Mikheil Saakashvili), there were indeed some periods, and some leaders, who were especially important to the anticorruption fight. One of those leaders was undoubtedly President Theodore Roosevelt. President Roosevelt was a complicated figure with complicated legacy, but with respect to anticorruption, he was a significant leader of the reform movement. Since today (September 14) is the 119th anniversary of President Roosevelt’s assumption of the presidency, I thought I’d use the occasion to share some of my favorite remarks of his on the subject of corruption The specific context of these remarks, which came in a December 1903 address to Congress, concerned his administration’s efforts to secure the extradition of bribe-taking officials who had fled the country, but President Roosevelt’s sweeping rhetoric sounds like it could have come from a modern anticorruption reformer in a particularly fiery mood:

There can be no crime more serious than bribery. Other offenses violate one law while corruption strikes at the foundation of all law. Under our form of Government all authority is vested in the people and by them delegated to those who represent them in official capacity. There can be no offense heavier than that of him in whom such a sacred trust has been reposed, who sells it for his own gain and enrichment; and no less heavy is the offense of the bribe giver. He is worse than the thief, for the thief robs the individual, while the corrupt official plunders an entire city or State. He is as wicked as the murderer, for the murderer may only take one life against the law, while the corrupt official and the man who corrupts the official alike aim at the assassination of the commonwealth itself. Government of the people, by the people, for the people will perish from the face of the earth if bribery is tolerated. The givers and takers of bribes stand on an evil pre-eminence of infamy. The exposure and punishment of public corruption is an honor to a nation, not a disgrace. The shame lies in toleration, not in correction…. If we fail to do all that in us lies to stamp out corruption we can not escape our share of responsibility for the guilt. The first requisite of successful self-government is unflinching enforcement of the law and the cutting out of corruption.

New Podcast, Featuring Michael Hershman

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After a brief summer hiatus, I’m happy to announce that a new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, my collaborators Nils Köbis and Christopher Starke interview Michael Hershman. Mr. Hershman, one of the co-founders of Transparency International (TI), has had a long and distinguished career on issues related to transparency and anticorruption, including work with the U.S. Senate Watergate Committee, the U.S. Agency for International Development, and, more recently, the Independent Governance Committee for FIFA. In the interview, Nils and Christopher talk with Mr. Hershman about his background, the founding of TI, the relationship between corruption and populism, and issues related to corruption and sports, among other topics.

You can find this episode here. You can also find both this episode and an archive of prior 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.

Following the Money: October 21 Conference on Making Finance More Transparent

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The Norwegian Branch of Publish What You Pay is bringing together a terrific group of investigative journalists, whistleblowers, bankers, government officials, and academics to discuss how to lift the veil of secrecy often surrounding illicit financial transactions. Those speaking at the free, online conference October 21 include –

* Bradley C. Birkenfeld, the individual who exposed how UBS helped ultra-wealthy Americans commit billions in tax fraud

* Jóhannes Stefánsson and Ingi Freyr Vilhjálmson. Stefánsson blew the whistle on the bribes the Icelandic company Samherji paid Namibian officials to corner the market on the country’s fishing quota while Vilhjálmson’s reporting exposed the role of Norway’s DNB bank in disguising the bribes

* William Bourdon, French avocat who has done so much to force French prosecutors, judges, and politicians to address corruption in France and abroad

* Simon Bendtsen, Danish editor and journalist with Berlingske Tidende who with colleagues exposed the Danske Bank money laundering scandal

* Linda Larsson Kakuli and Axel Gordh Humlesjö, members of the investigative team at Swedish national public television broadcaster SVT who revealed the Swedbank money laundering scandal

Information on the other speakers and how to register is here.

New Working Paper on Anticorruption Reform in U.S. History

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Endemic public corruption in developing and transition countries often seems intractable. Yet most countries that are currently perceived as having relatively high levels of public integrity–places like Sweden, Denmark, the United Kingdom, and the United States–were, at an earlier point in their history, afflicted with pervasive corruption similar to what one finds throughout the developing world today. Considering the history these countries may therefore make a valuable contribution to modern debates about anticorruption reform—not so much by providing simple lessons about what policies to adopt, but by offering a broader sense of how the complex process of anticorruption reform unfolds over time, and by calling into question certain widely-held beliefs about this process.

A couple years back, after attending a fascinating presentation by Mariano-Florentino Cuellar (a Justice of the California Supreme Court who somehow manages to continue to hold down his former day job as a professor at Stanford Law School), I became particularly interested in the history of my own country, the United States, in the late nineteenth and early twentieth century. The challenges facing anticorruption reformers in the United States during this period bear a striking resemblance to the challenges facing reformers in modern-day democracies in the developing world. Indeed, the United States is a particularly interesting case study because, in contrast to most of the other Western democracies that are currently perceived as having low corruption, the United States established political democracy well before it embarked on significant “good government” reforms.

Justice Cuellar graciously agreed to collaborate with me, and we finally have a draft paper entitled “Taming Systemic Corruption: The American Experience and its Implications for Contemporary Debates.” The draft now available on SSRN here, and is also available as part of the University of Gothenburg Quality of Government (QoG) Institute’s working paper series. Our article, which focuses principally on the period between 1865 and 1941, does not purport to reach firm conclusions about the reasons that the U.S. struggle against systemic corruption ultimately succeeded—let alone to draw facile “lessons” about “what works.” But we do find that the U.S. experience calls into question a number of commonly-held views about the struggle against corruption in modern developing countries: Continue reading →

OECD September 23 Webinar Corporate Anticorruption Compliance Programs

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By my count the laws of 25 nations either require or create strong incentives for firms doing business in their country to have an anticorruption compliance program.  Making it against company policy for employees or agents to participate in any corrupt act with sanctions ranging from demotion to termination is a no-brainer. Corporate employees, consultants, and agents are always on the paying side of a bribery offense and often facilitate conflicts of interest and other corrupt and unethical acts.  There is no reason why countries fighting corruption should not enlist the private sector in the fight.

Even when national law doesn’t require a compliance program, it makes sense for many reasons — legal, reputational, managerial — for companies to have one. The OECD has been a leader in persuading businesses large and small of the benefits of compliance programs and with the World Bank and the UNODC issued an invaluable guide to creating one.  Its latest effort to persuade businesses why they should establish a compliance program, the OECD examines why so many companies have established one even when not required to do so, how the programs work, and what companies’ experience with them has been. The study, “Corporate Anti-Corruption Compliance Drivers, Mechanisms, and Ideas for Change,” will be discussed at a September 23 webinar 15:00 Paris time. Registration will open shortly.  Details are here.

Tracking Corruption and Conflicts of Interest in the Trump Administration–September 2020 Update

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Back in May 2017, this blog started the project of tracking and cataloguing credible allegations that President Trump, and his family members and close associates, have been corruptly, and possibly illegally, leveraging the power of the presidency to enrich themselves. The newest update is now available here.

As previously noted, while we try to include only those allegations that appear credible, many of the allegations that we discuss are speculative and/or contested. We also do not attempt a full analysis of the laws and regulations that may or may not have been broken if the allegations are true. (For an overview of some of the relevant federal laws and regulations that might apply to some of the alleged problematic conduct, see here.)