Bribery and other forms of collusive corruption are notoriously difficult to detect. In many cases, the only people who even know that a crime has been committed are the perpetrators. To address the inherent difficulty of proving bribery, many countries use so-called leniency agreements, in which the government offers some form of sanction reduction or exemption to parties who voluntarily self-report and provide evidence against co-conspirators. Most of these leniency programs are designed and implemented by prosecutors’ offices (though they may be authorized by statute). Prosecutors exercise discretion in deciding whether and to what degree to offer sanction reductions to cooperating parties. Under the typical anticorruption leniency program, a self-reporting bribe-giver cannot claim, as a matter of law, an entitlement to any sort of sanction exemption.
Egypt is different. Unusually, and perhaps uniquely, Egypt’s anti–bribery law (Article 107bis of the Penal Code No. 58 of 1937) offers a full and absolute exemption from sanctions for any bribe-giver who self-reports and gives evidence against the culpable bribe-taker.
This approach is misguided, for several reasons:Continue reading →: Statutory Leniency for Bribe-Givers in Egypt: Revolutionary or Reprehensible?
First, this statutory exemption undermines deterrence of bribe-giving. Importantly, under Egyptian law there is no requirement that, in order to qualify for the sanction exemption, the bribe-giver must self-disclose before the government discovers that bribery occurred, or even before a prosecution commences. Rather, the time window during which the bribe-giver can claim the exemption remains open until the end of the trial. Thus, a bribe-giver faces virtually no risk of sanction, because if bribery is uncovered the bribe-giver can confess and obtain automatic and absolute leniency. On the other hand, if the bribe remains undetected, the bribe-giver stands to reap enormous benefits. So, Egypt’s leniency program likely makes bribe offers much more common.
Of course, one of the motivating ideas behind the leniency program is that this program will reduce bribe-taking, precisely because the civil servants who are offered bribes can anticipate that the bribe-givers will turn on them if the bribe is uncovered. But it is unlikely that the leniency law will induce civil servants to reject most bribe offers. After all, collusive bribery typically takes place in the context of long-term, mutually-beneficial relationships. The civil servant will often know that the bribe-giver is not likely expose them so long as the government has not uncovered the bribery, as the bribe-giver would prefer to preserve the pipeline of illegitimate benefits. In these scenarios, there is an obvious disincentive for bribe-givers to self-report, thereby lowering bribe-takers’ apprehension of the risk and undermining the deterrent effect on them. Moreover, bribe-givers would prefer to avoid the reputational harm and damage to relationships with the government that would come with admitting bribery. Also, to the extent that the leniency law does make civil servants more apprehensive about accepting bribes, the bribe-givers may offset that simply by offering more money.
In short, the effects of the statutory leniency provision on potential bribe-givers and bribe-takers are likely to be asymmetric. The provision will encourage more parties to offer bribes to civil servants, but will not have a sufficient, counter-balancing effect on civil servants’ incentives to accept those offers. Hence, on net, the provision probably increases the incidence of bribery overall.
In addition, granting the opportunity for leniency to one side of the transaction (the private parties who pay bribes) but not to the other side (the civil servants who take bribes) is unfair. True, some might argue that the disparate treatment is justified because civil servants should be held to a higher standard. But this argument misunderstands the nature of the pertinent unfairness. The unfairness is not due simply to disparate treatment, but rather to the disproportionate impact that the asymmetry in the law has for parties’ capacity to avoid punishment. The law consciously creates more inducements for civil servants to engage in bribery by virtually eliminating deterrence of bribe-giving. It is unfair for the law to expose civil servants to far greater temptation and then severely sanction them for succumbing to it.
To address these problems, Egypt should amend the statutory sanction exemption to distinguish between different categories of bribe-givers. Bribe-givers should only be eligible for leniency if the bribes they paid were in exchange for benefits to which they were already legally entitled. Conversely, those who pay bribes for benefits to which they are not entitled should be excluded from eligibility. A private party who bribes a civil servant to behave properly has presumptively been coerced by the civil servant. In such cases the bribe-givers are most deserving of the sanction exemption, and the civil servants are most deserving of punishment. By contrast, the law should not reward bribe-givers seeking to gain improper benefits, and should not give private parties the incentive to tempt civil servants with exorbitant bribes.
Additionally, the law should restrict the window during which bribe-givers can gain leniency by self-reporting. Once a prosecution of the bribery has been initiated, the statutory entitlement to leniency should no longer be available. At this stage, the investigation phase tends to have concluded and the government has likely already gathered the evidence it needs. Once the culpable bribe-taker has been exposed and there is sufficient evidence for enforcement, the sanction exemption loses its central purpose.
These amendments, if adopted, would mitigate the current asymmetry in Egypt’s leniency law in favor of a more balanced approach that deters both bribe-taking and bribe-giving, and would more effectively advance the goal of reducing public sector corruption.
Great post Ferial, very interesting. I agree that the self-reporting leniency window should be closed much sooner. But to the extent that such a program should exist at all, why only offer bribe-givers the chance to self-report? It seems quite arbitrary, and unfair as you mention. Is that something you would recommend?
Thank you so much for your thoughtful comment Ása, I really appreciate it! You are right there is certainly an attractive argument to opening up leniency to a certain category of bribe-takers in order to alleviate the asymmetry of the current law and there is a fantastic blog post also on GAB by Emma Li arguing this exact point. My reservation with it is more intuitive and deontological than related to the effectiveness of such a proposal. In the context of public sector corruption, when bribe-taking officials take a bribe they abuse public power… there is a further component of culpability on their part (I would say) relative to private party bribe-givers. Some have argued that (see Spagnolo 2004) that the optimal leniency program would award whoever steps forward first but again I think such a program may disproportionately excuse those with greatest culpability, who would be likely to sell out first considering they face risk of greater/higher punishment.