- The Interdisciplinary Corruption Research Network (ICRN) website
- Google Podcasts
- Apple Podcasts
- Pocket Cases
- Radio Public
Six years ago, the world was celebrating one of the most innovative and promising investigative commissions to curb grand corruption: Guatemala’s International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala, or CICIG). CICIG was a domestic-international hybrid organization that exposed sixty criminal networks, charged nearly 700 people, and took down high-level officials, including Guatemala’s sitting president, vice president, and head of the public prosecutor’s office (see here, here, here, and here). CICIG was so successful that it inspired two of Guatemala’s neighbors, El Salvador and Honduras, to create commissions on a similar model: MACCIH in Honduras (created in 2016) and CICIES in El Salvador (created in 2019). The key element setting these commissions apart from traditional anticorruption agencies was their hybrid domestic-international setup. In all three cases, the commissioners were supported by an international body (the UN for CICIG and Office of American States (OAS) for MACCIH and CICIES), and the commissions were led by foreigners. The commissions had ambitious mandates, but also limited powers: They could not prosecute on their own, but rather had to work with the national prosecutor’s office. Initially, MACCIH and CICIES scored a few remarkable victories, taking down a handful of government officials. This fueled optimism that these institutions, together with CICIG, would prove to be a powerful and sustainable anticorruption innovation.
Now, several years later, the bloom is off the rose. None of these commissions are still operating. And the story of their demise is remarkably similar: In each country, the commission’s investigations got too close to the incumbent administration, ultimately leading the president to either terminate the commission’s mandate or let it expire (see here, here, and here). This all-too-familiar story highlights a difficult challenge in fighting corruption effectively, one that is not limited to these special hybrid commissions: The main point of creating independent anticorruption bodies is to make possible the investigation and prosecution of the politically powerful—those who might benefit from de facto impunity if investigations were left to the ordinary institutions of justice—but at the same time, these independent commissions are sustainable only as long as the politically powerful would not find it more expedient to shut them down.
It’s difficult to thread this needle, and I’m reluctant to second-guess the leaders of CICIG, MACCIH, and CICIES regarding their strategic choices. Still, the fates of these commissions suggest a few valuable lessons that might be applicable to other anticorruption agencies that find themselves facing a comparable dilemma:
“Corruption’s War on the Law” is the headline on an article Project Syndicate just published. There former French magistrate and corruption fighter Eva Joly recounts the fate of those who have dared to confront powerful networks of corrupt officials and those who corrupt them. Maltese investigative journalist Daphne Caruana Galizia was murdered by accomplices of those she was investigating. So was Rwandan anti-corruption lawyer Gustave Makonene. So too was Brazilian anticorruption activist Marcelo Miguel D’Elia.
After a second attempt on his life, Nuhu Ribadu, first chair of Nigeria’s Economic and Financial Crimes Commission, the country’s premier anticorruption agency, famously remarked:
“When you fight corruption, it fights back.”
In her article, Mme. Joly, who received numerous threats for investigating and ultimately convicting senior French officials for corruption, explains that violence is just one way corruption “fights back.” The most recent head of Nigeria’s EFCC was arrested and detained on trumped up charges of corruption. Ibrahim Magu has been suspended from office pending further proceedings, proceedings unlikely to be held this century.
At the same, Nigerian anticorruption activist Lanre Suraju is, as this blog reported last week, being charged with “cyberstalking” for circulating documents from a court case that implicate associates of the current Attorney General in a the massive OPL-245 corruption scandal. This form of intimidation, which Nigerians have dubbed “lawfare,” has now been exported to Europe. Italian prosecutors are being subjected to both criminal charges and administrative action for having the nerve to prosecute one of Italy’s largest companies for foreign bribery (here).
President Biden has declared the global fight against corruption to be a national priority, and he will shortly host a democracy summit where Brazil, Italy, Malta, Nigeria, and Rwanda will be represented at the highest level. Might he remind them which side of the fight they should be on?
As most readers of this blog are likely aware, in addition to this blog I also co-run an anticorruption podcast series–called “KickBack: The Global Anticorruption Podcast”–in collaboration with the Interdisciplinary Corruption Research Network. Ours is certainly not the only anticorruption-themed podcast out there. Indeed, it seems that there’s been a proliferation of such podcasts in the last couple of years, and it can sometimes be hard to keep track of all the podcasts that people in the anticorruption may want to follow. Fortunately, the Anti-Corruption & Governance Center at the Center for International Private Enterprise (CIPE) has put together a list of ten anticorruption podcasts which are worth checking out. (My ICRN colleagues and I are grateful that KickBack is included in this list!)
Also, as a fun way to publicize all of these podcasts and attract new listeners, CIPE is running a “People’s Choice” contest, where you can vote for your favorite anticorruption podcast and your favorite individual podcast episode(s). You can vote here. I feel like I should put in a plug for KickBack, but really, as folks always say at awards shows, it’s an honor just to be nominated. 🙂
In all seriousness, thanks to CIPE for calling attention to all of these podcasts–some of which I already knew about and listened to, but others of which I only learned about from CIPE’s list, and all of which are worth a listen. I’m providing below links to these ten podcasts, but I would recommend going to CIPE’s post, which provides more detailed descriptions of each podcast. (I’m sure there are more podcasts out there that the anticorruption would find of interest, so I invite readers to publicize other podcasts in the comments on this post.)
Here are the ten anticorruption podcasts on CIPE’s list so far:
- KickBack: The Global Anticorruption Podcast (naturally!)
- FCPA Compliance Report (Tom Fox)
- Democracy That Delivers (Peter Glover/CIPE)
- Compliance Perspectives (Adam Turteltaub/Society for Corporate Compliance & Ethics)
- Bribe, Swindle, or Steal (Alexandra Wrage/TRACE International)
- Making a Killing (Hudson Institute)
- The Suspicious Transactions Report (Isabella Chase/Royal United Services Institute)
- Financial Crime Insights (Alanna Putze/Royal United Services Institute)
- Anti-Corruption Conversations (Billy Jacobson/Allen & Overy)
- Fraud Eats Strategy (Scott Moritz)
The Covid-19 pandemic has been an economic disaster as well as a public health disaster, and massive public spending will be needed to promote recovery. In Europe, the EU is projected to spend up to €1.8 trillion on pandemic recovery. One of the biggest recipients of these EU funds will be Italy, the EU’s hardest-hit member state. Currently, Italy is poised to receive €123 billion in loans and €69 billion in grants between now and 2026. Provision of these funds has already started; the first tranche of €25 billion arrived this past June. This funding will support Italy’s Covid recovery plan, known as the Piano Nazionale di Ripresa e Resilienza (PNRR), which—in the name of territorial cohesion—will allocate 40% of the funds to the Italian south.
If history is any guide, a massive amount of that money will be misallocated, misspent, or outright stolen by corrupt public officials colluding with organized crime groups. The mafias have a long history of bribing Italian officials for lucrative public contracts. Between 2014 and 2020, Italy received €77 billion from the EU for use in structural and investment funds; 60% of those funds were “fraudulently requested or obtained,” often by organized crime, with the 85% of that fraud occurring in the South. Much of the fraud occurs when illegitimate companies request funds in the form of loans and grants; the companies either don’t exist or are liquidated upon receipt of the funds.
But we needn’t look only to history: Italy’s three most powerful crime syndicates—Cosa Nostra in Sicily, the Camorra in Campania, and the ‘Ndrangheta in Calabria—are already bribing Covid response officials, winning fraudulent contracts, and plundering businesses in receipt of PNRR funds. As the EU money pours in, we can expect that these mafia groups will use their corrupt networks to siphon off a staggering percentage of the EU Covid relief funding.
What should European policymakers do in response? It’s tempting to insist—as anticorruption activists have in this and other contexts—that the EU and Prime Minister Mario Draghi’s government adopt enhanced oversight and transparency measures, to better ensure that funds are spent appropriately. But that would be a mistake. Right now, the priority must be on promoting a swift economic recovery. Attaching burdensome anticorruption requirements to the public spending needed to support that recovery will slow the process down too much. This is, I realize, a bitter pill to swallow. Many readers will instinctively resist the idea that the EU and the Italian government might bankroll Italy’s most powerful mafias (to the tune of up to €200 billion). But if Italy is to recover from the economic effects of the Covid-19 pandemic, the priority must be the swift delivery of recovery funds, even if this means that much of the money will be intercepted by the mafia.
Civil society organizations are poised to write Nigerian Attorney General Abubakar Malami asking he dismiss criminal charges against long-time Nigerian anticorruption activist Olanrewaju Suraju. His crime? Circulating documents implicating an associate of the Attorney General in the alleged payment of $1 billion by oil giants Royal Dutch Shell and ENI in return for rights OPL-245, Nigeria’s most lucrative offshore oil block.
Not only is a criminal indictment for Suraju’s conduct absurd on its face, the Community Court of Justice for the Economic Community of West African States, whose decisions are binding on Nigeria, has declared the cyberstalking law under which he is being charged in violation of the African Peoples and Human Rights Charter.
The text of the letter is below. Concerned NGOs and individuals are invited to add their names. Use the “Contact” function at the top of the page. Alternatively, letters supporting Nigerian activists’ freedom to urge that those responsible for corruption be brought to justice can be sent to Nigerian President Muhammadu Buhari through firstname.lastname@example.org
Dear Attorney-General Abubakar Malami:
Our attention has been drawn to press reports of an indictment, approved by your office, against Olanrewaju Suraju, chair of the anti-corruption and human right group HEDA, for alleged cyberstalking.Continue reading
Brazil’s Clean Company Act (CCA), enacted during a time of mass protests against corruption and impunity, was a major step forward in the fight against corporate crime. While the CCA is best known for its imposition of strict civil and administrative liability on legal entities that commit corrupt acts against public administration, the CCA is also notable for its authorization, in extreme cases, of a “corporate death penalty.” More specifically, the CCA requires the dissolution of a corporation or other legal entity when (1) the legal entity is in fact a “shell company” used to conceal illegal acts (such as money laundering, tax evasion, or procurement fraud), or (2) the legal entity was used on a regular basis to facilitate or promote the performance of wrongful acts. Applying the corporate death penalty to shell companies created for the purpose of facilitating or concealing criminal acts is straightforward and not terribly controversial, especially since these shell companies do not engage in any genuine productive activity. The controversy arises with respect to the second category, which can include productive companies.
Applying the extreme sanction of corporate dissolution might seem like appropriately strong medicine for companies, even productive companies, that have been involved in serious and ongoing illegality. In practice, however, this sanction is not working as intended. A much more effective and realistic sanction, at least in the Brazilian context, would be to compel a persistently corrupt (but productive) company’s shareholders to sell their controlling stake in the company—thus preserving the company as a going concern, but placing it under new ownership and management.
Gab readers have been treated to a lively and valuable debate in past weeks on precisely what we mean when we say that someone or some behavior is “corrupt.” Many readers have joined the discussion. Responding to my request for their views by offering comments and analyses of six real world cases where a court, ethics commission, or legislature has been asked to decide whether the conduct of a public official was corrupt.
I had promised to post “the right answers” to the six, or at least the answers the court, commission or legislature gave this week. I am putting it off to share the guest post below by classics scholar and American attorney Kellam Conover. Drawing on the dissertation that garnered him a PhD. in Classics from Princeton, he explains how citizens of ancient Athens decided when an official’s conduct was corrupt. What he takes from their method provides the only way I see for arriving at genuine right answers – not only to the six cases I presented but to the general issues of how to define corruption and how to measure our progress in overcoming it. Many thanks Kellam.
I have read with great interest the fascinating discussion that has unfolded recently among Bo Rothstein, Matthew Stephenson, Robert Barrington, Paul Heywood, and Michael Johnston. The questions they raise about how to define corruption, how to link up theory with practice, and how to measure success are all ones I have grappled with since writing my dissertation on Bribery in Classical Athens.
As a historian, I’ve spent far more time describing corruption than prescribing solutions. But I hope a few observations from ancient Athens will be helpful to others. First, in my view corruption defies definition because it is an inherently political claim that changes with different social and political contexts. Second, and as a result, it may be fruitful to augment anti-corruption programs with institutions specifically designed for articulating, contesting, and legitimating evolving political norms. Finally, I offer one potential metric of success: i.e., whether patterns of corruption in a polity have grown less disruptive over time.Continue reading
A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Michael Johnston, the Charles A. Dana Professor of Political Science, Emeritus, at Colgate University. Professor Johnston is one of the leading academic voices on the study of corruption, and has been working in this area for over three decades. In our interview, we discuss the trajectory of his own research on corruption, including his identification and analysis of four distinct “syndromes” of corruption, as well as his broader perspective on the overall direction of the field, how his own views have shifted in light of new findings and developments, and his advice for a new generation of researchers interested in better understanding corruption and how to combat it.
You can also find both this episode and an archive of prior episodes at the following locations:
- The Interdisciplinary Corruption Research Network (ICRN) website
- Google Podcasts
- Apple Podcasts
- Pocket Cases
- Radio Public
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 anticorruption world is abuzz with discussion of the Pandora Papers, a major leak of financial documents that exposed how wealthy elites, including various political leaders and shady businesspeople, conceal their assets. But alongside revelations about the illicit expenditures of the rich and powerful, reporting based on the Pandora Papers also highlighted the role that lawyers and law firms have played in facilitating these arrangements—many of which are technically legal, but at least some of which suggest possible money laundering or other illicit activities.
This is hardly the first time that concerns have been raised about attorneys’ involvement in money laundering. Indeed, such concerns have existed for years, and have been repeatedly emphasized by groups like the Financial Action Task Force, and a 2010 study found that lawyers played a facilitating role in 25% of surveyed money laundering cases in an American appeals court. But perhaps because of the Pandora Papers revelations, U.S. legislators finally appear to be taking the problem seriously. Within days of the Pandora Papers leak, Members of Congress introduced a bill called the ENABLERS Act, which would expand the scope of the Bank Secrecy Act (BSA) so that many of the BSA’s requirements, including the duty to file suspicious activity reports (SARs) with the Treasury Department and to implement anti-money laundering (AML) controls, would apply to a broader set of actors—including attorneys and law firms.
The American Bar Association (ABA), which has consistently resisted pretty much every effort to impose even modest AML requirements on the legal profession, has strenuously opposed this aspect of the ENABLERS Act. The ABA’s principal objection is that many BSA requirements—especially the requirement that covered entities file SARs with the government—conflict with the lawyer’s ethical duty of client confidentiality—the attorney’s obligation not to reveal information gained in the course of representing a client to outside parties, including the government, save in a very narrow set of circumstances. (The duty of confidentiality is related to, but distinct from, the attorney-client privilege, which prevents a lawyer from testifying against her client in court regarding private communications that the attorney had with the client in the course of the legal representation, or providing such communications in response to a discovery request. Some critics have also raised attorney-client privilege concerns about SAR filings.) The ABA and other commentators have argued that extending the BSA’s mandatory reporting requirement to attorneys, as the ENABLERS Act would do, compromises attorneys’ ability to guarantee confidentiality, and thereby discourages the full, frank communications between attorney and client that are essential for effective legal representation.
The ABA has a valid concern, but only to a point. A broad and unqualified extension of BSA reporting requirements to attorneys could indeed impinge on traditional and important principles of lawyer-client confidentiality. But this is not a reason to leave things as they are. Rather, the ENABLERS Act and its implementing regulations can and should draw more nuanced distinctions, imposing SAR and other AML requirements on lawyers when those lawyers are acting principally as financial advisors, but enabling lawyers to preserve client confidentiality—including with respect to suspicious transactions—when lawyers are providing more traditional legal representation, for instance in the context of litigation.Continue reading