Yearly Archives: 2020

New Blog on Police Corruption and Accountability

Posted on by
Reply

These past several weeks, protests in the United States and around the world have brought much-needed scrutiny to the problem of police misconduct. While the main focus of attention has rightly been on issues related to systemic racism and police violence, rather than police corruption (narrowly defined), concerns about police misconduct relate to important themes that the anticorruption community has long emphasized. Indeed, as I discussed in my post a couple weeks back, there are intriguing and troubling similarities in the organizational-cultural characteristics associated with corrupt firms and abusive police departments. And perhaps some of the lessons learned from institutional reform strategies designed to combat corruption can help inform approaches to reforming law enforcement agencies more generally.

I’m not the right person to lead that conversation, since I lack the relevant expertise, but I’m happy to announce a new addition to the blogosphere that will focus on these issues. The CurbingCorruption project (which I’ve mentioned earlier), which already featured a section on fighting corruption in the law enforcement sector, has launched a new blog called Trusted Policing. According to the official description:

Achieving Trusted Policing requires changes to laws and to police institutional practices to stop corruption, brutality, racism and harassment. It requires leadership of change not only from protesters but also from those in positions of responsibility – the police themselves, elected officials, public officials, whether in government, law enforcement agencies – and those who analyse and live the problems – academics, not-for-profit organisations, grass-roots reformers, police committees. The purpose of this blog is to contribute to one small part of this massive improvement challenge: to serve as a source and a repository for good experience and constructive proposals for police improvement from around the world.

The blog is brand new and only has a handful of posts so far, but those posts are quite interesting, and I think this may be a useful forum for those interesting in engaging in dialogue at the intersection of anticorruption reform and policing reform more generally.

Fighting Corruption in U.S. Civil Asset Forfeiture Requires State-by-State Reforms

Posted on by
1

Civil asset forfeiture is a judicial process through which law enforcement officials seize assets belonging to a person suspected of a crime. To be subject to forfeit, the assets in question must be either the proceeds of crime or were used to further that criminal activity, but in many jurisdictions, civil asset forfeiture does not require a criminal conviction, or even the formal filing of criminal charges, and the typical legal threshold is probable cause that the seized property is connected to criminal activity, rather than the “beyond a reasonable doubt” standard generally required for a criminal conviction.

In the international context, civil asset forfeiture is an integral component in the battle against corruption. Empowering law enforcement agencies to seize ill-gotten gains, without the need to first secure a criminal conviction, is one of the most effective methods of punishing corrupt actors and depriving them of the proceeds of their crimes. But civil asset forfeiture is not limited to seizing the proceeds of grand corruption, and in the United States, the civil asset forfeiture system, particularly at the state and local level, has itself has become a significant vector for corruption, albeit on a much smaller scale, with local officials taking advantage of lax oversight to use seized funds for their own personal benefit. For example, in March 2020, the Michigan State Attorney General’s Office brought charges against Macomb County Prosecutor Eric Smith, alleging that Smith and other county officials had misused forfeiture funds for things like personal home improvements (including a security system for Smith’s house and garden benches for several other employee’s homes), parties at country clubs, and campaign expenditures. Smith is far from the only public official accused of corruption relating to forfeiture funds. To take just a few other examples: State revenue investigators in Georgia used millions in forfeited assets to purchase travel and trinkets like engraved firearms; police officers in Hunt County, Texas awarded themselves personal bonuses of up to $26,000 from forfeiture accounts; and the District Attorney in Lancaster County, Pennsylvania leased a new personal car with forfeiture funds.

To be clear, there are concerns about the civil asset forfeiture system in the United States that run much deeper than the misappropriation of funds. Critics have vigorously attacked both the legal underpinnings of the civil forfeiture system as it currently exists in the U.S., as well the system’s implementation. But for the purposes of this post I want to bracket those larger issues to focus on the question of why the civil forfeiture systems at the state and local level in the United States pose especially high risks of corrupt misappropriation, and what might be done about this (assuming that the civil forfeiture system is here to stay, at least in the short term).

Continue reading →

“NGOs with Foreign Support”: A New Draft Law Threatens Ukraine’s Anticorruption NGOs

Posted on by
2

In May, Ukrainian Member of Parliament Oleksandr Dubinsky, a controversial member of the Servant of the People Party (Ukraine’s ruling party, headed by President Volodymyr Zelensky), registered a draft law that would label certain civil society organizations as “foreign agents.” More specifically, this legislation—which resembles Russia’s 2012 “foreign agent” law—would:

  • Oblige NGOs receiving at least 50% of their financial support from foreign entities to include the term “foreign support” in their organization’s name, and to include in any materials published by the NGO a disclaimer stating that the materials are published by an organization that functions with foreign support;
  • Initiate the creation of a central register of such NGOs, requiring the Ministry of Justice to publicize a list of these NGOs on its official website and to publish annual reports of foreign-funded NGO activity in Ukraine;
  • Require the management of these NGOs to undergo annual polygraph interviews in order to review whether or not these individuals have committed treason; and
  • Prohibit any individuals in NGO management positions from working in the civil service or holding membership on supervisory boards or in the leadership of state enterprises for five years after working in a foreign-funded NGO.

While Dubinsky’s proposed legislation poses a serious threat to all NGOs that receive foreign funding (except for a few categories that the draft law specifically exempts, such as NGOs that work in the sphere of culture, arts, science, prevention and health of citizens, social protection, social support for the disabled, and environmental protection), this legislation would have a particularly adverse impact on the work of anticorruption NGOs.

Continue reading →

Anticorruption Bibliography–June 2020 Update

Posted on by
Reply

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.

Review of Søreide and Makinwa “Negotiated Settlements in Bribery Cases: A Principled Approach”

Posted on by
2

The resolution of foreign bribery cases through some type of out-of-court agreement has spread from the United States to other OECD nations.  The latest figures show that close to 80 percent of foreign bribery prosecutions by OECD nations have been settled short of a full trial on the merits.  Settlements free prosecutors to pursue additional violations, but there is the ever-present risk the defendant will get off too easy, that the settlement terms will not deter the defendant or others from continuing to bribe officials of a foreign government.

The OECD’s Working Group on Bribery in International Business Transactions is now developing standards to ensure that settlements will provide the “effective, proportionate, and dissuasive criminal penalties” the OECD Antibribery Convention mandates. As it proceeds, it will find Negotiated Settlements in Bribery Cases: A Principled Approach, a new volume from Elgar edited by anticorruption scholars Tina Søreide and Abiola Makinwa, an invaluable guide.  In 12 chapters, the cross-disciplinary, multinational group of experts the editors assembled review the use of settlements in the United States, the experience of other nations and the World Bank with settlements, ways to judge whether a settlement serves the public interest, and recommendations for gauging whether a particular settlement passes the public interest test. Continue reading →

New Podcast, Featuring Irio Musskopf

Posted on by
Reply

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 Irio Musskopf, a Brazilian software engineer who co-founded and developed an open-data anticorruption project called Operation “Serenata de Amor, which uses artificial intelligence algorithms to analyze publicly available data to identify and publicize information about suspicious cases involving potential misappropriation of public money. Mr. Musskopf discusses the background of the project,the basic statistical approach to detecting suspicious spending patterns,the reasons for relying exclusively on public data (even when offered access to non-public information), and some of the challenges the project team has encountered. The conversation also discusses more general questions regarding the role that intelligent algorithms can play in anticorruption efforts, including questions about whether and where such algorithms might be able to supplant human analysis, and when human decision-making will remain essential..

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.

The Art World is Rife with Corruption, But Suspicious Activity Reporting Requirements Aren’t the Answer

Posted on by
1

Customs officials at JFK airport didn’t have a reason to be suspicious. After all, the package wasn’t anything special—just a regular shipping carton with an unnamed $100 painting inside. Only later did it emerge that the $100 unnamed painting was, in fact, Hannibal, a 1981 painting by Jean-Michel Basquiat valued at $8 million. Authorities across three different continents had spent years trying to track down Hannibal, along with other famous works by Roy Lichtenstein and Serge Poliakoff, that Brazilian banker Edemar Cid Ferreira had used to launder millions of funds he illegally obtained from a Brazilian bank. It wasn’t until 2015, nearly ten years after Edemar’s conviction for money laundering, that US authorities managed to return Hannibal to its rightful owner, the Brazilian government. Meanwhile, thousands of other paintings move across borders with few questions asked about who owns them, who’s buying them, and for what end.

The art world is readymade for corruption. Paintings—unlike real estate—are readily portable. Their true value, as Hannibal illustrates, is readily disguisable. And the law does not require disclosure of the buyer or seller’s true identity. Unlike real estate, where ownership can be traced to a deed, the only available chain of title for most artwork is its “provenance”—which is commonly vague, falsified, or not readily verified. Recognizing that money laundering in the art world is a big (and growing) problem, there’s been a flurry of recent proposals to address that problem. In the United States, Congressman Luke Messer proposed a new law called the Illicit Art and Antiquities Act, which, if enacted, would amend the Bank Secrecy Act (BSA) to require art and antiquities dealers to develop an internal compliance system, report cash payments of more than $10,000, and file the same sorts of “suspicious activity reports” (SARs) with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that the BSA currently requires of financial institutions and money service businesses. And in Europe, the EU’s Fifth Anti-Money Laundering (AML) Directive dramatically expanded suspicious transaction reporting requirements for art dealers.

These developments show that legislators on both sides of the Atlantic are taking the challenge of art corruption seriously, which is an encouraging development. Unfortunately, expanding SAR requirements, while appropriate in other contexts, is misguided when it comes to the art world, for two reasons:

Continue reading →

Improving Brazil’s Whistleblower Regime

Posted on by
Reply

Because corruption is usually conducted in secret, without readily identifiable victims, effectively tackling corruption often requires evidence from insiders. Therefore, providing adequate protections and incentives to whistleblowers is crucial. Brazil, like many countries, does not have a strong tradition or culture of whistleblowing, making it all the more important that the legal system provides sufficient protections and incentives for insiders to provide material information about corrupt schemes. In the past few years, Brazil has made important progress in this area, but much remains to be done.

Two years ago, a specific statute introduced the practice of rewarding people who furnished information about criminal conduct. This legislation provided that Brazilian states could establish telephone hotlines for reporting unlawful activities, and also authorized all levels of government to establish rewards for whistleblowers who provide information that lead to the prevention, detection, and punishment of crimes and administrative offenses. That statute, while a good first step, was vague and incomplete. Near the end of last year, Brazil took another important step in the direction of modernizing its whistleblower laws with the enactment of the 2019 Anti-Crime Act. This Act requires that national, state, and local governments, as well as their agencies and companies, establish an ombudsman office to ensure that all people can report crimes against public administration (including corruption), administrative offenses, and any action or omission damaging to the public interest. The law further provides that whistleblowers cannot be held criminally or civilly liable for the report (as long as the information was not provided falsely and maliciously), that whistleblowers are entitled to the protection of their identities, and that whistleblowers are entitled to the same protections against retaliation as are witnesses and victims. Violation of the prohibitions on retaliation against whistleblowers can entitle the whistleblower to double damages and punitive damages. The new law also includes a clearer provision on financial rewards for whistleblowers, expressly providing that if a whistleblower who provides information leading to the recovery of proceeds from crimes against public administration, the corresponding government can grant to whistleblowers financial rewards of up to 5% of the recovered assets.

Despite this progress, though, the legal framework on whistleblowers in Brazil still suffers from a number of important deficiencies, and needs further improvements:

CONTINUE READING

Guest Post: Special Journal Issue on Corruption in the Developed World

Posted on by
Reply

Today’s guest post is from Fabrizio Di Mascio, Associate Professor of Political Science at the University of Turin.

Much of the discussion of the corruption problem focuses on developing countries. This focus is understandable, given that corruption is a much more pervasive, or at the very least more visible, in the developing world. Indeed, some have suggested that corruption will tend to disappear as countries become wealthier and as democratic institutions are consolidated. Yet while it may well be that (crude) corruption tends to decline as countries develop, the evidence suggests that corruption remains widespread in developed countries, including mature democracies. To better understand both the characteristics of corruption in the developed world, and the mechanisms that might help combat that corruption, the open-access academic journal Politics & Governance recently published a special issue (which I co-edited) on “Fighting Corruption in the Developed World: Dimensions, Patterns, Remedies.”

After an introductory editorial, the special issue includes eight articles, all of which are available for download for free:

Barring Corrupt Officials from Entering the United States: A Guide to the Process

Posted on by
1

Since 2004 it has been American policy to deny entry into the United States of corrupt foreign officials and their immediate families. President George W.  Bush initiated the policy by presidential order, and in 2008 Congress added its voice, enacting legislation barring “foreign kleptocrats involved in the extraction of natural resources” from entering the United States.  Beginning in 2012, the Congressional ban was extended to include all those involved in “significant corruption,” and in 2014 the provision was expanded again to cover foreign officials involved in “a gross violation of human rights.” The following year Congress clarified that designations may be made publicly or privately.

The first public designation was made in 2018 (Albanian judge and prosecutor Adriatik Llalla), and since then more than 150 individuals from over 30 countries have been publicly barred from entry — either for corruption or human rights violations.  Although the State Department web site does not keep a running list of those who have been barred, the NGO Human Rights First does. A spreadsheet available on its website can be sorted by country, crime, date, and other fields and includes links to each State Department sanctions announcement. It is updated whenever new sanctions are announced

The Department encourage civil society activists, foreign diplomats, and others with information relevant to the designation process to contact it. The best way is through its personnel in the field as designations typically arise from recommendations made by U.S. embassy staff.

Two excellent descriptions and discussions of the visa denial policy by analysts at the Library of Congress’ Congressional Research Service are here and here.

The Human Right First spreadsheet, “U.S. Government Public Section 7031(c) Sanctions Designations to Date,” can be accessed here.

GAB contributor Daniel Binette’s recommendations for greater clarity in how visa denial decisions are made is here.