GAB readers know that Italy has repeatedly failed to meet its obligations under the OECD Antibribery Convention (here. here, and here). That in recent high-profile cases where evidence Italian companies bribed officials of foreign governments was overwhelming, the companies, their executives, and accomplices were all acquitted. And that civil society organizations in Italy, Nigeria, and the United Kingdom have urged the OECD in no uncertain terms to condemn the Italian government’s blatant violation of its obligation to levy “effective, proportionate, and dissuasive criminal penalties” on those who bribe foreign public officials (here).
Last Friday, the OECD did exactly that. In a comprehensive, well-reasoned report, a model for future compliance reviews, its Working Group on Bribery in International Business Transactions fingered both the legislature and the judiciary for Italy’s noncompliance. The legislature because the sanctions for foreign bribery are too low to deter anyone or any company from paying a bribe, the judiciary for interpreting the rules of evidence in ways that almost invariably end in acquitting defendants.
Indeed, it is hard to read the Working Group’s analysis of the decisions in recent cases without concluding as I have that underneath the strained reasoning in the recent acquittals is some mix of bribery, favoritism, or threats.
Like courts everywhere, Italian courts can infer the existence of a fact from the surrounding circumstances. In foreign bribery cases, and only foreign bribery cases, reviewers found the judges assessed each individual piece of circumstantial evidence separately rather than considering it in context. It’s as if when given the parts of a picture separately, the courts refused to draw any conclusion as to what the parts together showed.
The perversity of this approach is shown in a recent case where the court refused to attribute a bribe to a foreign official. Prosecutors had shown money was inexplicably paid to the official’s three cousins. Rather than inferring from the lack of any reasonable explanation for the payments and other circumstances that the money was for the official, the court dismissed the case because there was no direct evidence, a written agreement or audio recording, unequivocally proving the official received the bribe. (Ironically, and suspiciously, in the same case the court was quick to infer defendants’ innocence from “speculative and uncorroborated” circumstantial evidence.)
Treating circumstantial evidence piece-by-piece makes it almost impossible to win a conviction in foreign bribery cases. As the report’s authors explain,
One consequence of this approach is that large opaque payments to intermediaries have been rejected as evidence of foreign bribery.
It is no wonder prosecutors and other observers believe the bar for proving foreign bribery is, as the report states, “unduly onerous.”
The quality of the Italian judiciary has been recognized for centuries, from its pioneering efforts to adopt the precepts of Roman law to modern life to its principled resistance to fascist directives during World War II. The review suggests that the reason Italian courts are misapplying the rules of evidence in foreign bribery case is a lack of training. To this writer, the consistent, willful misapplication of straightforward rules of evidence smacks of something more than ignorance.
The report is not wholly critical. Improvements in whistleblower protection and lengthening the statute of limitations for offenses committed by individuals are cited. The creation of a specialized group in the Milan Public Prosecutor’s Office to pursue allegations of foreign bribery is praised as is prosecutors’ continued determination “to valiantly investigate and prosecute foreign bribery.”
While credit for the high quality of the review goes to its American and German authors and credit for resisting reported efforts to water down if not whitewash their findings to Working Group members (here), ReCommon, HEDA, and The Corner House, civil society organizations based in Italy, Nigeria, and the United Kingdom also merit praise for keeping the pressure on. For not letting Working Group members forget just how important it is that Italy be called to account for breaching provisions of the single most important measure put in place to fight corruption. “Italy hauled over the coals by OECD,” their joint news release on the report is here.