Monthly Archives: February 2022

Transparency International Ukraine’s Call on International Companies to Stop Working in Russia

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Transparency International’s Ukraine Chapter (on whose Board I serve) recently posted the following message on its social media accounts, which I am reposting here:

Transparency International Ukraine
📢 We call for international companies to stop working in Russia and stop financing the war in Ukraine.
Economic sanctioning of Russia is already imposed by governments of the EU, US, Canada and other countries. However, fighting Putin’s aggression is not only the matter of national governments. International businesses have to make their contribution.
☝️ Every tax penny that international companies pay to the Russian budget costs Ukrainians lives. This money is being spent for weaponizing the Russian army, which attacks both Ukrainian military and civilians.
😢 Over four days 352 civilians were killed, over 1600 wounded. Russians hit apartment buildings, daycare facilities, buses with civilians and ambulances. Hundreds of thousands of people are forced out of their homes to stay alive.
Supporting the russian regime is unacceptable for companies that value human lives.
Facing financial risks connected with dismissal of the Russian market is nothing in comparison with reputational losses.
🙌 You can also tell businesses that you are against their work in Russia!
🔹 We prepared a list of well-known companies so you could address them publicly https://bit.ly/sbir_companies
We will update it
🔹 And with regard to some of the companies, we have explicitly explained how doing business in Russia affects the civilian population https://bit.ly/sbir_photos
🔹 Select the company that you would like to appeal to and tag it in posts on Twitter, Instagram and Facebook. For example,
@CompanyX, your taxes in #russia goes for the shelling of civilians in Ukraine. It’s time to stop doing business there, isn’t it?
Templates of the text for such posts you can find here: https://bit.ly/sbir_texts
The more people we are, the louder our voice is! Join us💪

New York Real Estate Owned by Putin’s Buddies

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Source: Jennifer Gould, Here’s where Russian oligarchs and their families own property in NYC, New York Post, February 27, https://nypost.com/2022/02/27/heres-where-russian-oligarchs-and-their-families-own-property-in-nyc/

Several media reports suggest sanctioning Putin’s supporters won’t be that easy because their ownership is hidden under layers of corporate vehicles. As Jennifer Gould’s story in the New York Post shows, thanks to the work of many investigative reporters and NGOs. we do know where many of Putin’s buddies have stashed their wealth in the Big Apple. Click here for a similar guide to London properties TI-UK has drawn up.

Nigerian Human Rights NGO Denounces Prosecution of Corruption Whistleblower Olanrewaju Suraju

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This blog has several times reported on Nigeria’s prosecution of corruption whistleblower Olanrewaju Suraju (here, here, here). His “crime:” Helping expose massive bribery in the nation’s oil sector.

Fortunately, for both Mr. Suarju and the citizens of Nigeria, Nigerian civil society is standing behind him, demanding the farcical prosecution cease. Below is the most recent show of support.

Legal Defence & Assistance Project or LEDAP, a prominent Nigerian human rights NGO denounces the prosecution and calls not only for the government to immediately drop the charges against Mr. Suraju but investigate those behind this perversion of course of justice.

LEDAP condemns the prosecution of anticorruption crusader, Mr. Olanrewaju Suraju, Calls for investigation of Mr. Suraju’s corruption allegations in the Malabu Oil Scam.

LEDAP strongly condemns the prosecution of Mr. Olanrewaju Suraju, the chairman of the Human and Environmental Development Agenda (HEDA) for his allegations of corruption against the former Attorney General of the Federation, Mohammed Adoke, in the Malabu oil block allocation scam. Mr. Suraju has consistently made public massive bribery and abuse of power against Mr. Adoke and other foreign companies, for which some are currently facing criminal charges in Italy.  Rather than investigate the allegations raised in Mr. Suraju’s many petitions, the Attorney General has elected to prosecute him, undermining the so-called anti-corruption agenda of the regime.

Continue reading →

A Brief Note on Russia’s War Against Ukraine

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Russia’s invasion of Ukraine (or, more accurately, the dramatic escalation and expansion of the invasion that Russia already started eight years ago) is horrifying. As I type this, Russian forces are moving against Kyiv, and Ukrainian defense forces and reservists are preparing to defend their capital city against overwhelming odds, while the Ukrainian army elsewhere in the country is doing its best to resist Russian advances from all directions. I have nothing useful to say about this terrible situation. I am not a military analyst, an expert in geopolitics, or even terribly knowledgeable about aspects of this crisis closer to my own areas of expertise (such as questions regarding the efficacy of sanctions the West is imposing, or could impose). I’m just a professor, not terribly well known outside my fairly narrow areas of academic specialization, who runs a blog about anticorruption. But this morning, I can’t really think of anything else to write about.

Maybe at some point I’ll be able to collect and organize my thoughts and say something coherent about how this war relates to the global fight against corruption. There most certainly is a connection–probably several connections–even though corruption/anticorruption is only one part of the story. For now, let me just share scattered thoughts and reactions: Continue reading →

Guest Post: The Keys to the Success of Transnational Investigative Journalism

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Today’s guest post is from Professor Liz Dávid-Barrett, the Director of the Centre for the Study of Corruption at the University of Sussex, and Slobodan Tomić, Lecturer in Public Management at the University of York.

Over the last decade, investigative journalists have broken a series of blockbuster stories on financial secrecy and illicit financial flows. These clusters of stories have typically been based on, and named after, leaked documents and data from law firms, financial institutions, or government agencies: LuxLeaks (2014), SwissLeaks (2015), the Panama Papers (2016), the Paradise Papers (2017), the FinCEN Files (2020), the Pandora Papers (2021), and, most recently, Suisse Secrets (2022). One of the remarkable things about each of these cases is that they involved not a single story or series of stories by a single media outlet in a single country, but rather were the product of a transnational collaboration of a network of investigative journalists. It has always been the case that investigative journalism has been a vital tool for exposing and deterring corruption. But what we seem to be seeing now is the emergence of a transnational coalition of journalists that is sufficiently agile, dynamic, and capable of working across borders to be a match for the perpetrators of grand corruption, money laundering, and other forms of organized crime.

Indeed, these transnational networks of investigative journalists can be seen as a new institution of global governance. Yet their emergence presents a series of puzzles. How have they overcome the difficulties that plague law enforcement when they try to act transnationally? How have journalists learned to trust one another in handling sensitive data, and to have faith that their colleagues will hold off on publishing until the agreed date? In addition to questions like these, the emergence of transnational networks of investigative journalists raises a broader question: What does this new form of global governance add to our collective efforts to tackle grand corruption?

With support from the UK government’s Serious Organised Crime and Anti-Corruption Evidence (SOC ACE) programme, we have been investigating these questions, principally through interviews with investigative journalists in Latin America and the Balkans who have participated in these networks. Our research has highlighted three important features of these transnational journalistic networks. Continue reading →

Why Didn’t the Disclosure of the Beneficial Owners of Real Estate Make a Difference?

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Anticorruption advocates have long thought that real estate and money laundering go together like a horse and carriage. At least in the United States. With a little help from a friendly lawyer, a corrupt official or other big time criminal has until recently been able to use an anonymous shell company to hide their money by buying a luxury mansion or pricey condominium. Because the real estate registry listed the company, not the crook, as the owner, the real owner’s identify was hidden. From law enforcement, the media, and civil society.

In 2016 the U.S. government made a start on ending this abuse. It began to require the disclosure of the beneficial owner of any corporation which paid cash for properties in cities where real estate purchases were likely used to hide stolen money.  Initially, and as expected, the new rule seemed to have the desired effect: all cash purchases of real estate appeared to drop significantly — indicating a gaping loophole in the antimoney laundering laws had been plugged.

But the first paper published by the Anticorruption Data Collective finds to the contrary.  Authors Matt Collin of the World Bank and Brookings Institution, Florian M. Hollenbach of the Copenhagen Business School, and David Szakonyi of George Washington University report the rule had no impact “on the number of, the total price volume, or the share of corporate all-cash purchases in targeted counties.”  Indeed, they could find “little difference in the patterns of corporate all-cash purchases versus a ‘placebo’ outcome that should not be affected by the policy.”

Beneficial ownership disclosure is a favorite reform of anticorruption advocates. One that would seem to have an obvious, immediate salutary effect. Why didn’t it here?

The authors offer two reasons, and suggest there could be others. Their paper demands careful attention. One because of the implications for beneficial ownership disclosure rules, and second, and more importantly, because it shows how important it is to carefully assay anticorruption reforms. Their paper is here and comments are welcomed.  And GAB looks forward to more work by the Anticorruption Data Collective.

Taking on the Demand Side of Foreign Bribery: How U.S. FCPA Settlements Can Facilitate Foreign Prosecutions

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Laws like the U.S. Foreign Corrupt Practices Act (FCPA) target what is sometimes referred to as the “supply side” of transnational bribery transactions—the firms and individuals of offer or pay bribes to foreign officials in order to secure a business advantage. But what about the demand side? All too often, the government officials who demand or receive these bribes escape accountability—even when the bribe-paying firms are forced to pay substantial penalties for FCPA violations. Years ago, some U.S. Department of Justice (DOJ) prosecutors floated the theory that bribe-taking officials could be charged as abettors to, or co-conspirators in, FCPA violations, but that theory, though legally plausible, failed to gain traction in the courts. On occasion, the DOJ has prosecuted bribe-taking foreign officials for money laundering. And more recently, Members of the U.S. Congress have introduced a new bill, the Foreign Extortion Prevention Act (FEPA), which would make it a crime under U.S. law for a foreign public official to seek, demand, or accept a bribe. FEPA’s chances of enactment are uncertain (the vast majority of bills fail, after all); moreover, even if enacted, FEPA’s impact may be circumscribed by the practical and political difficulties of arresting and trying foreign public officials, particularly those that do not have any contact with U.S. territory.

What about the bribe-taking public official’s own government? Shouldn’t that government take the lead in prosecuting its own public officials when they behave corruptly? There would be a nice symmetry—and a great deal of practical advantage—to a system in which the supply-side government (say, the United States) goes after the bribe-paying company, while the demand-side government goes after the bribe-taking public official. But often this doesn’t happen: In the majority of cases where the U.S. government imposes FCPA sanctions on a company for paying bribes in a given country, there is no parallel or subsequent prosecution by that country’s government of the corrupt officials involved.

Sometimes the explanation is political: the public officials involved are sufficiently powerful and well-connected to escape domestic accountability in their home countries, even when their misconduct is known. That’s a big problem, and one that statutes like FEPA are designed to address. But there’s another reason that demand-side governments often fail to hold their own officials accountable: a lack of capacity and an associated lack of evidence. In a great many cases, even when a bribe-paying firm settles an FCPA case with the US government, and in doing so admits to certain facts and provides evidence about the misconduct to the DOJ, the demand-side country government does not receive sufficient evidence to identify, let along prosecute, the corrupt officials involved—either because the company did not supply that information to the DOJ, or the DOJ did not turn that information over to the demand-side official’s government. True, FCPA settlement agreements are usually public, but the official statements of facts in these agreements are often not sufficiently precise and detailed to give a foreign enforcement agency what it needs to make out a case.

The U.S. government can and should fix this problem. Doing so would not require new legislation. Rather, it could be accomplished through a straightforward and easily implementable change in DOJ policy. Continue reading →

Narrowing the Scope of Brazil’s Administrative Improbity Law: Why the New Limits Will Strengthen, Not Weaken, the Law’s Efficacy

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Brazil’s 1992 Administrative Improbity Law, which authorized severe sanctions on government agents who commit “acts against the public administration,” was the first Brazilian statute specifically targeted at government corruption. Last year, Brazil adopted extensive amendments to this law, many of which were controversial. In a recent post, I criticized the amendment that reduced the number of institutions responsible for enforcing the Improbity Law. But other controversial amendments to the law are, in my view, positive developments. In particular, I want to defend two other amendments that critics have asserted weaken the law:

  • First, under the original version of the Improbity Law, a public official could be sanctioned for negligent behavior that caused damage to the public treasury. Under the amended version of the law, only intentional acts can be considered administrative improbity punishable under this statute.
  • Second, the original version of the law listed ten forms of administrative misconduct that would constitute “violations of the principles of public administration,” but, importantly, that list was not exclusive. Rather, the listed forms of misconduct were presented only as examples. This meant that law enforcers could, and often did, bring an action under the Improbity Law for conduct that, in the enforcer’s view, violated a “principle of public administration,” such as morality and equity, even if the particular form of alleged improbity was not included as one of the specifically listed forms of misconduct in the statute. The amended law constrains enforcement discretion by establishing a well-defined and restricted list of acts that qualify as violations of the principles of public administration.

Critics, including many anticorruption advocates, assert that these changes unduly narrow the scope of the law, thereby undermining one of Brazil’s most important anticorruption instruments. These concerns, while understandable, are misplaced: Both of the above amendments improve the law by ensuring that it is administered fairly and used to target serious corrupt acts, rather than being wielded as a political weapon to punish partisan adversaries for good-faith mistakes.

Continue reading →

Guest Post: The Orientalist Criticisms of Qatar’s World Cup

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Today’s guest post is from Andy Spalding, a professor at the University of Richmond School of Law and the Chair of the Olympics Compliance Task Force.

This year is bookended by two high-profile and highly controversial megasports events: the Beijing Olympics, happening now, and the FIFA Men’s World Cup, to be held in Qatar in November and December. But while commentators often lump these two events together as depressing examples of how megasports events are all too often hosted by corrupt regimes with appalling human rights records, in fact they are quite different. As I argued in my last post, the Beijing Winter Games represents the end of an era—the last Olympics to be awarded before the International Olympic Committee (IOC) insisted on human rights and anticorruption clauses in its contracts with host countries. But Qatar marks a transition to something entirely new, and much more encouraging.

You wouldn’t know that from most of the Western/Northern commentary on Qatar’s hosting of the World Cup, which portrays this as yet another example of megasport abuse. That mischaracterization smacks of what Edward Said called “orientalism”: the tendency of the West/North to dismiss Eastern, and particularly Islamic, perspectives and experiences with an arrogance or hypocrisy that serves to reproduce neocolonial patterns of privilege and domination. Continue reading →

South African Court Slaps Down Attack on Corruption Prosecutor

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Early Wednesday a South African judge ruled that former President Jacob Zuma’s attacks on the prosecutor leading the case him were baseless and that Zuma’s trial on corruption charges proceed forthwith. Zuma had claimed prosecutor William Downer’s conduct in pursuing the case was so egregious — running the gamut from the commission of serious crimes, to breaches of ethics, to intimations of racial animus — that the charges against him must be dismissed. Or, at the least, Downer be removed from the case and trial therefore delayed indefinitely while a new prosecutor was found.  

In seeing through Zuma’s desperate attempt to derail the case, and standing up to the still powerful former president, Judge Piet Koen provided a model judges everywhere should follow.  When Zuma raised the unfounded, scurrilous attacks on the prosecutor, Koen ordered they be aired without delay.  Upon sifting through the evidence, he promptly issued a scholarly 109-page opinion finding that not one of the allegations withstood scrutiny and that there was therefore no basis to find Downer was not a fair-minded, independent prosecutor and hence no reason Zuma would not receive a fair trial if Downer remained on the case.

Today’s 61-page decision came in response to that earlier decision. Zuma had requested that the trial be halted while he appealed it.  In again a scholarly and carefully written decision, Koen knocked down the legal arguments offered in support of an appeal while reiterating the absence of any facts showing Downer guilty of misconduct or bias.

Zuma has done his best to pressure the judge into throwing out or delaying the case, with hundreds of supporters crowding into the courthouse and surrounding grounds at his every appearance to let their views be known and with some issuing not so veiled threats against the judge. Koen could have easily caved, finding merit to the claims or a way to put off the trial for months if not years.

That he did not and that he instead set the trial for this April stands in marked contrast to the way attacks on Nigerian, Zambian, and Italian prosecutors have been handled (here, here, and here). Rather than standing up for them, judges, justice ministry officials, and even fellow prosecutors stood aside after the attacks were launched with some collaborating with the attackers. If corrupt officials and their accomplices are to face justice, Judge Koen’s response must become the standard when those prosecuting them come under attack.