Monthly Archives: January 2022

SLAPPing Back at Corruption: Protecting Journalists from Frivolous Lawsuits

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Investigative journalism plays a crucial role in exposing corruption. Journalistic exposés often prompt not only prosecutions, resignations, and other forms of individual accountability, but can also serve as the catalyst for broader legal and institutional reforms. Yet investigative journalism—especially into the misdeeds of the wealthy and powerful—is risky. Journalists can sometimes face physical threats, and occasionally deadly violence. Even when their safety is not in jeopardy, journalists investigating corruption encounter legal trouble. In some jurisdictions, governments take legal action against reporters, seeking to impose large fines or even incarceration. In other cases, the targets of investigative reporting seek to derail such reporting through defamation lawsuits, even when the defamation claims lack legal merit. These sorts of suits are commonly referred to as SLAPPs—Strategic Lawsuits Against Public Participation. In many cases, the costs of defending against even a meritless defamation suit can drain the journalist or news organization’s funds, and such suits can also take a psychological toll on their targets. The litigious and deep-pocketed figures who bring SLAPPs seek to take advantage of these facts in order to intimidate journalists into silence.

Not all SLAPPs target journalists who expose corruption—the issue is much broader. But SLAPPs have frequently been used against journalists who write about corruption, and the anticorruption community therefore has a clear interest in legal reforms that would counter the threat that SLAPPs pose . So what can be done about this problem? Broadly speaking, there two primary legislative responses to the prevalence of SLAPPS: “Anti-SLAPP” laws and “SLAPPback” laws:

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Civil Society Organizations Can Help Fight Corruption in the COVID-19 Response. But Only if Governments Let Them

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Corruption in the health sector—a longstanding problem that may cost $500 billion per year globally—has become an even more salient concern in light of the COVID-19 pandemic. As the virus swept the globe, many governments responded by sidestepping traditional procurement safeguards in the interest of speeding up emergency responses. While it was important to provide relief as quickly as possible, the relaxed regulations allowed corruption to thrive, leading to numerous scandals. To illustrate with just a few of the many, many possible examples: Bolivia’s Minister of Health was detained for allegedly purchasing 179 unusable ventilators at twice their original price; Indonesia’s Minister for Social Affairs was suspected of having pocketed US$1.1 million in funds relating to COVID-19 aid; and senior leaders and wealthy individuals in numerous countries, including Canada, Peru, Argentina, Spain, and Poland, jumped the queue to get access to vaccines. Much of this health sector corruption arises due to a lack of transparency and accountability in the governing systems. Especially in the midst of what seems like a never-ending pandemic, working towards combatting this type of corruption is especially salient as citizens are relying on the government for more health-related needs.

Anticorruption advocates have long argued that civil society organizations (CSOs) can and should play an important role in monitoring government activities and promoting accountability in the health context and elsewhere. A particularly encouraging example of the constructive role that CSOs can play, in the specific context of the COVID-19 response, comes from Argentina. Last year, the Argentine chapter of Transparency International, known as Poder Ciudadano, launched a COVID-19 Public Procurement Observatory, which uses open-source information to make procurement deals available to the public. Using this monitoring tool, Poder Ciudadano carried out an exhaustive survey of public purchases and contracting that took place within the COVID-19 emergency procurement framework. By December 2020, Poder Ciudadano had tracked more than seven hundred procurement activities valued at US$200 million. In addition to its work in monitoring COVID-related procurement, Poder Ciudadano worked with other CSOs to ensure transparency and equity in vaccine distribution. Using information provided by the Ministry of Health, these CSOs ensured daily publication of information about the numbers of vaccine shipments, their distribution, and who had been vaccinated. These transparency measures help prevent improper favoritism and other departures from the official vaccine distribution plan.

This example is both encouraging and instructive. The Poder Ciudadano case highlights how CSOs can be effective in promoting accountability and transparency in procurement and distribution. But this example also underscores that in order to play this role, CSOs in developing countries need outside funding, partnerships, and resources, as well as the support and cooperation of their governments. CSOs can play a vital role, but only if they have the right kind of help.

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Making Release of the CPI into Something Useful in the Fight Against Corruption

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Yesterday’s release of the Corruption Perceptions Index prompted the annual, dreary, unproductive pattern of overblown press releases and gnashing of teeth. Critics cite their government’s failure to sharply increase its CPI score as an excuse for issuing press releases bashing it for failings of every kind. The teeth gnashing comes from those in governments doing their best to fight corruption and frustrated that their efforts have had no discernable impact on the score.

No part of my work helping countries curb corruption has been more frustrating than trying to explain to the media, dedicated government corruption fighters, and civil society that they should stop making such a fuss about yearly changes in CPI scores. As Matthew reiterated in yesterday’s post (for the umpteenth time), short-term comparisons are “a pointless, misleading, intellectually bankrupt exercise.” But my explanations, GAB posts, and the academic literature explaining in excruciating detail why it takes years if not decades for anticorruption reforms to affect a nation’s CPI score have all fallen on deaf ears.

Thankfully, government corruption fighters and their supporters in Nigeria have found a way to use release of the CPI to advance the fight against corruption.  As explained here, last year its Minister of Information and Culture responded to the release of the CPI with a statement describing what the government had done over the past year to prevent corruption. This year the Nigerian Civil Society Legislative Advocacy Centre, TI’s national chapter, issued a statement putting the CPI in context and highlighting reforms underway and where more needs to be done.

Most importantly, rather than using the release of the CPI to criticize the many Nigerian public servants who spend their days fighting corruption, it went out of its way to applaud them, saying:

“It is important to stress that [the CPI score] is not an assessment of Nigeria’s anti-graft agencies who are making commendable efforts in reducing (in the fight against) corruption in Nigeria despite the political interference they face.

The full text of the Advocacy Centre’s statement follows. It merits close study by all those looking for ways to transform the annual, dreary, unproductive ritual around release of the CPI into something that can help produce results in the fight against corruption.

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Re-Upping Last Year’s Post on How (Not) to Cover the About-To-Be-Released CPI

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Later this week (tomorrow, I believe) Transparency International (TI) will release the newest version of its annual Corruption Perceptions Index (CPI). I was going to do a post on this, but I realized as I started writing it that what I had to say was virtually identical to what I wrote at this time list year. So I’m just going to paste below the text of last year’s post, while noting my sincere hope that by next year, or at least within a few years, this will no longer be relevant: Continue reading →

From the Permit Raj to the Billionaire Raj: Corruption, Liberalization, and Income Inequality in India

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For over a year, tens of thousands of Indian farmers camped on the highways of New Delhi in protest of three new agricultural laws heralded by Prime Minister Narendra Modi. Those laws proposed a national framework for liberalizing the country’s heavily-regulated agricultural markets, allowing farmers to sell their crop yields on the private market rather than selling at fixed prices in government-regulated wholesale markets. While Modi and other proponents of the laws argued that these regulated markets failed to improve farmers’ livelihoods and were rife with corruption, opponents feared that the laws would create an unregulated free market dominated by large, exploitative corporations. On September 5, the protests against the laws culminated in a mass rally of over half a million farmers. Two months later, Modi announced that he would be repealing the laws, a stunning public reversal that few had expected from the ordinarily unyielding Prime Minister. 

To put these most recent developments in a broader context, the dispute over the farm laws showcases a debate over liberalization and deregulation in India that has been raging for more than half a century. It is a story not only of competing visions for the country’s economy, but also of the deep interrelation between corruption and income inequality. As the agriculture fight demonstrates, liberalization has been offered as a mechanism to solve both problems. But a closer look at India’s experience with liberalization complicates this theory. Liberalization may have helped fuel the country’s precipitous economic rise, but it only further exacerbated income inequality while further entrenching the systems of corruption that favor the country’s wealthy elite. At best, unchecked liberalization in India has simply repackaged corruption in new forms; at worst, it has allowed corruption to flourish.

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Public Procurement in Peru: Three Urgent Reforms to Curb Corruption

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Peru is in the midst of yet another major corruption scandal, this one involving a cartel of companies called the Construction Club. The Club allegedly operated as a bid-rigging cartel for major public construction works, in which the members of the Club would decide which one of them would win any given public contract and at what price, and the other Club members would deliberately submit higher bids to create the illusion of a competitive process. What started as an antitrust scandal has turned into a corruption scandal, as the Club is also accused of bribing public officials (including former President Vizcarra) to “guarantee the functioning of the cartel”.

The alleged bribery and bid-rigging are shocking but not surprising. This sort of corruption is all too common in the public procurement process in Peru and elsewhere (see here, here, and here). The vulnerability to corruption stems largely from the lack of accountability and transparency in the public procurement process, as well as the lack of professionalism in the public service. Can anything be done to address these longstanding problems? While there is no simple or overnight solution, there are in fact a number of measures that Peru can and should adopt to address the corruption vulnerabilities in its public procurement process and reduce the likelihood of another incident like the Club scandal recurring in the future.

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New Podcast, Featuring Elizabeth David-Barrett

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After our holiday hiatus, I’m pleased to announce that a new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, my Interdisciplinary Corruption Research Network (ICRN) colleagues Nils Kobis and Christopher Starke interview Elizabeth David-Barrett, Professor of Governance and Integrity and Director of the Centre for the Study of Corruption at the University of Sussex. In the interview, Professor David-Barrett discusses the concept of “state capture,” the mechanisms by which corrupt actors may capture the state, and the new forms of state capture that have been emerging in many countries, as well as how the concept of state capture relates to lobbying and machine politics. Later in the interview, she addresses various questions related to anticorruption reform measures, including the unintended consequences that some well-intentioned reforms might sometimes have, and where up-and-coming researchers can make the most valuable contributions to the anticorruption struggle. 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.

Papers from Conference on Empirical Approaches To Anti-Money Laundering And Financial Crime Suppression

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The papers to be delivered at the Central Bank of the Bahamas third annual international conference on Empirical Approaches to Anti-Money Laundering and Financial Crime Suppression are now available here.  The conference brings together a mixture of academics and practitioners to assess what we know and don’t know about curbing money laundering. The conference schedule and instructions on virtual attendance is here.

Papers likely of special interest to GAB readers include –

  • Enabling African loots: Tracking the laundering of Nigerian kleptocrats’ ill-gotten gains
  • Conceptual Framework for the Statistical Measurement of Illicit Financial Flows
  • Complex Ownership Structures: Addressing the Risks for Beneficial Ownership Transparency
  • Dirty Money: How Banks Influence Financial Crime
  • Does Changing the Rules Change Behaviour? Comparing Regulatory Reform and Behavioral Outcomes in Shell Company Transparency

The Netherlands’ Dutch Caribbean Problem

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The Kingdom of the Netherlands has a corruption problem. Although the country of Netherlands maintains a squeaky-clean image, ranking eighth in the world on Transparency International’s Corruption Perceptions Index (CPI), the Kingdom of the Netherlands is comprised of not only the Netherlands itself, but also three semi-autonomous island countries in the Caribbean. These island countries, along with three territorial islands directly controlled by the Netherlands, collectively form the Dutch Caribbean. And the Dutch Caribbean, unlike the Western European country, has a serious corruption problem, the severity of which is being diluted by the positive perceptions of the Netherlands.

Before addressing corruption in the Dutch Caribbean specifically, it’s worth explaining the Kingdom’s somewhat unusual constituent-country structure. Technically speaking, the Kingdom is composed of four equal autonomous countries: The Netherlands, Aruba, Curacao, and Sint Maarten. The citizens of all four countries are Dutch nationals. Each country has its own constitution and parliament, but the Kingdom is sovereign, retaining responsibility for foreign policy, defense, and other “Kingdom issues,” including oversight of human rights and freedoms within all Kingdom territories. Of the four countries that comprise the Kingdom, the Netherlands is by far the largest, accounting for 98% of both the Kingdom’s land mass and population. And although Aruba, Curacao, and Sint Maarten each have a representative within the Kingdom’s council of ministers, the Netherlands in effect also directly controls the Kingdom, as well as the Caribbean islands of Bonaire, Saba, and Sint Eustatius, which are Dutch territories.

Most international corruption assessments lump the Dutch Caribbean in together with the Netherlands. The CPI, for example, does not include separate evaluations for Aruba, Curacao, or Sint Maarten, nor does the U.S. State Department. The tendency to consider the Dutch Caribbean as part of the Netherlands, and to provide a single report or score for “the Netherlands” as a whole, obscures the fact that the Dutch Caribbean does, in fact, have a very serious corruption problem on each of its constituent islands, as the following brief survey illustrates:

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Highway Robbery: Preventing Corruption in U.S. Infrastructure Investment

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Last November, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA), a $1.2 trillion package that earmarks $110 billion for repairing and rebuilding roads and bridges. This is the single largest investment in U.S. roads and bridges since the construction of the interstate highway system in the mid twentieth century. And though it is a federal project, much of the money will be distributed to state governments, which will determine how best to use the money to address their infrastructure needs. As state governments receive the IIJA money, we can expect the states to launch a public tender frenzy.

In all the extensive discussion and debate over the IIJA, there has been relatively little focus on the corruption risks inherent in this sort of spending program—even in an affluent, reasonably well-governed country like the United States. After all, corruption in large construction projects, and infrastructure projects like roadbuilding in particular, is all too common. Unfortunately, the IIJA’s design exacerbates rather than reduces these corruption risks. While it is too late to address those flaws in the statute, there are some measures that the federal government can and should adopt now to mitigate the inherent corruption risks. Continue reading →