Monthly Archives: October 2023

Institutionalizing People Power: How Switzerland Overcame Systemic Corruption

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How do states escape pervasive corruption? Expanding the small set of success stories, a burgeoning line of research (see here, here, here, here, or here) seeks answers to this question through the study of polities that have achieved control of corruption before Second World War. This group of so-called “early achievers” mostly consist of Western and Northern European countries as well as territories that seceded from them. One lesson that has been drawn from the study of early achievers is that the gradual depoliticization of governance is an essential step on a society’s path to becoming free from endemic corruption. Indeed, some have suggested that transitioning to a robust democracy before building a sufficiently effective and clean state is a recipe for corruption and state capture, as political parties will organize on clientalist lines and focus mainly on capturing rents. The key to combating systemic corruption, on this account, is building a strong and professional class of civil servants and judges who are insulated from politics.

The case of Switzerland, which has received little attention so far, presents a puzzle in this regard. Now a textbook example of effective (domestic) corruption control, early nineteenth century Switzerland shared many of the klepocratic governance patterns we find in low- and middle-income countries today. Long dominated by a handful of wealthy families, from the 1830s onwards Swiss state institutions fell under the sway of a group of entrepreneurs involved in the financing and organization of railway construction. These “Railway Barons” dominated Swiss politics through a web of patronage networks and used the captured institutions of the state to assert their individual interests. But by the beginning of the twentieth century, Switzerland was free from such systemic corruption. Remarkably, and contrary to conventional thinking about early achievers, Switzerland accomplished this not by limiting democracy, but by doubling down on it. Continue reading →

The Perils of Taking Shortcuts: How Brazilian Prosecutors Alleged Carelessness with Evidence May Undo Years of Hard Work 

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Brazil’s so-called Lava Jato (Car Wash) Operation, launched in 2014, exposed one of the largest corruption schemes ever. The investigation resulted in over 361 convictions (for corruption, money-laundering, procurement fraud, and other crimes); among those convicted were numerous prominent members of the Brazilian business and political elite, including the current President, Luiz Inacio Lula da Silva (known as Lula). In building its cases against these defendants, Brazilian federal prosecutors made extensive use of “leniency agreements,” offering some companies lighter penalties in exchange for evidence against other parties. One of the most important of these leniency agreements was the one Brazilian prosecutors, working in conjunction with U.S. and Swiss prosecutors, reached with the Odebrecht company, a major Brazilian infrastructure conglomerate at the center of the corruption scheme.

But over the last few years, the Car Wash operation has started to unravel, with several of its most important achievements reversed. In 2019 a Brazilian hacker publicized text messages allegedly exchanged between Sergio Moro, the presiding judge in many of the Car Wash cases (including Lula’s), and the Car Wash prosecutors, prompting allegations of bias. The specialized Car Wash prosecutorial task force was disbanded in February 2021, and the Brazilian Supreme Court annulled Lula’s conviction on procedural grounds in April 2021, paving the way for his re-election to a third presidential term in October 2022. The most recent setback to the Car Wash Operation, already discussed and debated on this blog (see here, here, and here), is a decision by the Supreme Court Justice Dias Toffoli this past September. In that decision, Justice Toffoli declared that, due to procedural errors, none of the evidence acquired in the leniency agreement with Odebrecht could be used in any judicial proceeding. This ruling puts numerous Car Wash convictions at risk: Defense attorneys may now seek to annul convictions in cases in which their clients were convicted primarily on the Odebrecht evidence.

Many in the anticorruption community, in Brazil and abroad, have denounced Justice Toffoli’s ruling, and have suggested that it may have been improperly influenced by political or personal considerations. But as a technical legal matter, Justice Toffoli’s decision was probably correct. While it is understandably frustrating to see so much hard work wiped away and the prospect of convicted corrupt actors going free, the responsibility here appears to lie more with the Car Wash prosecutors than with the Supreme Court. Indeed, the recent developments in the Car Wash saga should serve as a cautionary tale for investigators and prosecutors. In their understandable zeal to catch and convict bad actors, law enforcement authorities must be careful to scrupulously and rigorously observe all legal requirements. Continue reading →

Lankan Civil Society and IMF Staff: Allies in Sri Lanka’s Fight Against Corruption

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Sri Lanka is recovering from one the worst bouts of kleptocratic rule in modern times. That recovery crucially depends of course on ending its rulers’ wholesale theft of the nation’s resources, an effort where the International Monetary Fund staff and Sri Lankan civil society have wittingly or unwittingly joined forces.

The alliance has Its roots in events of 2022. That spring citizens had had enough. With the economy cratering and poverty skyrocketing, they joined to force the latest in a string of kleptocrats from office (pictured here). That summer the replacement government pledged to fight corruption. That fall IMF staff recommended approval of a $2.9 billion loan to help the country dig out of the hole corruption dug.

Sri Lanka’s corruption was so blatant, and the link between it and the economy’s free fall so clear that IMF’s staff insisted that in return for the loan the government promise to enact a program “reducing corruption vulnerabilities through improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework, and conducting an in-depth governance diagnostic, supported by IMF technical assistance.”   

One year on, as the IMF board considers whether to release a second tranche of the loan, that promise remains unfulfilled.  The evidence is in two reports released in September, one by Sri Lankan civil society (here) and the other by the IMF staff (here). Both chronicle the government’s numerous failures to implement promised reforms. Both point the same underlying problem: the impunity high level officials continue to enjoy.

Continue reading →

Special 100th Episode of the KickBack Podcast

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After a bit of a hiatus, a new episode of KickBack: The Global Anticorruption Podcast is now available. This is the 100th episode of the series, and to mark that milestone, the podcast hosts asked a dozen leading anticorruption experts (and me) to address one or both of two questions (in under three minutes):
  1. What is one thing about corruption that you’ve changed your thinking on in the past 10 years?
  2. What is the most significant development — positive or negative — in relation to corruption and corruption studies over the past thirty years?’
In case you want to jump around, here is the list of people featured in the episode, and the time stamps indicating where you can hear their response to those questions, together with a direct hyperlink:
  • Michael Johnston: 2:34
  • Leena Koni Hoffmann: 7:52
  • Alina Mungiu-Pippidi: 10:24
  • Paul Heywood: 12:51
  • Florencia Guerzovich: 15:40
  • Joseph Pozsgai-Alvarez: 18:16
  • Jorge Alatorre: 21:36
  • Delia Ferreira Rubio: 23:33
  • Matthew Stephenson: 26:55
  • Susan Rose-Ackerman: 29:43
  • John Githongo: 32:15
  • Jon Quah: 33:34
  • Laode Muhammad Syarif: 36:12
You can also find both this episode and an archive of prior episodes at the following locations: KickBack was originally founded as a collaborative effort between GAB and the Interdisciplinary Corruption Research Network (ICRN). It is now hosted and managed by the University of Sussex’s Centre for the Study of Corruption. If you like it, please subscribe/follow, and tell all your friends!

U.S. Prosecutors Newest Addition to Their Anticorruption Toolkit

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For more than three decades the U.S. Justice Department has sought ways to pressure American corporations to police their executives, employees, and consultants. To see that they take measures to see those they employ don’t pay bribes, rig prices, or commit other crimes. Shown above is pictorial representation of its latest tool.

It shows a crab gripping a stack of hundred dollar bills with its claw. That is precisely what the Justice Department expects a corporation to do if it discovers someone in its employ has paid a bribe, fixed a price, or committed another serious crime to advance the corporation’s interest. The company is to clawback monies paid the miscreant.

Continue reading →

Corruption, Extremism, and the Crisis in Israel: Some Tentative Thoughts on Possible Connections

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Since the terrorist organization Hamas’s mass murder and kidnapping of Israeli civilians ten days ago, I’ve been finding it difficult to think about anything other than the news from Israel/Palestine. Like many of you, I’ve been spending a lot of time (probably too much) doom-scrolling, worrying about my friends in the region, and anxious about about what will happen next. A lot of people, including university professors and those who have public platforms of some kind, have been weighing in on various aspects of this conflict. I have been hesitant to do so, because I have basically no professional expertise in the most important dimensions of the current crisis (such as the politics and history of the Middle East, military strategy, international humanitarian law and the law of war, etc.). What I write about on this platform is corruption, and the current crisis in Israel has little to do with corruption.

Little, but not nothing. At the risk of engaging in an all-too-common form of academic narcissism (“Look how this biggest important news event relates to the narrow topic I happen to study!”), I did want to offer some brief and tentative thoughts on how corruption, and the response to it, may have played a minor but notable role in precipitating the current crisis.

I’m not going to say much here about corruption on the Palestinian side. In an insightful post from back in June 2021, GAB contributor Magd Lhroob addressed aspects of this issue, noting both how Hamas’s initial electoral success back in 2006 may have had more to do with the perception that the Palestinian Authority (PA) was hopelessly corrupt, and also how the growing frustration of ordinary Gaza residents at Hamas’s corruption strengthens Hamas’s incentives to foment violence with Israel. Here I want to say a few words about corruption issues on the Israeli side, particularly the corruption charges against Prime Minister Netanyahu. Continue reading →

The U.S. Approach to Corruption in Ukraine: Change or Continuity?

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[A quick note: I drafted the post below last week, before the horrific events in Israel over the weekend. I have nothing useful to say about that tragedy–I have no expertise in military or security policy, Middle Eastern politics, terrorism, or anything along those lines. But I wanted to express my deepest sympathy to those who have been affected by Hamas’s horrific and inexcusable attack on innocent civilians. I will continue to write posts on assorted corruption-related issues, like the one below, because that’s what I know and that’s what I do. But this is one of those moments when other things seem so much more important. Am Yisrael Chai.]

Last week, a piece in Politico discussed the contents of a confidential (but not classified) U.S. State Department’s “integrated country strategy” for Ukraine; a shorter public version of that strategy document was released last August, but the version Politico obtained was longer and more detailed. The big headlines coming out of the Politco story (both literally and figuratively) concern corruption. The U.S. strategy document, Politico notes, “sees corruption as the real threat,” and “warns Western support may hinge on cutting corruption.” The Politco story made a bit of a splash among some of the people who follow these issues closely, but I don’t think it tells us much that we didn’t already know, and the new material from the confidential version of the report, so far as I can tell from Politico’s reporting, mainly concern political calculations that are basically common knowledge, though perhaps a bit sensitive for the U.S. government to declare formally in a public document.

Let me start out by noting one thing that I think the Politico piece gets exactly right, and that poses a general, and by now familiar, challenge to those who both support Ukraine’s resistance to Russian aggression and believe anticorruption reforms are vital for the country’s future success. As the Politico story puts it:

The [Biden] administration wants to press Ukraine to cut graft … [b]ut being too loud about the issue could embolden opponents of U.S. aid to Ukraine, many of them Republican lawmakers who are trying to block such assistance. Any perception of weakened American support for Kyiv also could cause more European countries to think twice about their role.

This is indeed a real issue, and a rhetorical and political challenge. Having said that, I think the Politico story, perhaps inadvertently, may simultaneously (1) understate the extent to which the U.S. government has already been willing to publicly raise the need for serious anticorruption reforms in Ukraine, and (2) overstate the extent to which the U.S. is relying on a coercive approach (mainly express or implied aid conditionality) to press for such reforms. A few thoughts on each: Continue reading →

Guest Post: A Proposal for an Online Practical Politics Platform

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Today’s guest post is from Peter Evans, who recently stepped down as Director of the U4 Anticorruption Resource Centre, and who previously led the Anti-Corruption Evidence (ACE) program at the UK’s Department for International Development.

All too often, approaches to anticorruption reform—like mainstream approaches to growth, development and governance more generally—frame the issue as a technical problem. In development agencies, multilateral organizations, and civil society organizations working on corruption issues, it is not uncommon to hear people say, “We don’t do politics,” or to mention politics only in the context of blaming the failure of a project, or non-receptiveness to technically sound advice, on a “lack of political will.” But as Stefan Dercon emphasized in his influential recent book Gambling on Development: Why Some Countries Win and Others Lose, understanding and addressing development challenges requires engaging seriously with the political economy constraints and opportunities related to power and elites. While Dercon’s book is not about corruption specifically, it is chock-full of corruption examples. And, in fairness, an increasing number of anticorruption specialists have gotten the message that “technical only” approaches often fail, and that making real progress often requires us to understand, and be brave enough to talk about, politics—and in particular the way power is distributed and used in the relevant country or sector.

But while recognizing that politics matters—and that serious anticorruption work requires serious political economy analysis—is a necessary first step, actually putting this idea into practice turns out to be hard, even for people who want to do it—because political economy analysis is hard, and much of the available information is obscure, difficult to locate, or difficult for busy practitioners to digest. Some country- and sector-specific political economy research is published, though not all of it is written in an accessible way. And some research that is highly relevant to political economy analysis doesn’t include terms in the title or abstract that would make its relevance obvious to a busy professional trying to find useful information. Some agencies pay consultants to deliver bespoke political economy analysis, or build skills through training courses, but the utility of these efforts may be limited to that particular agency. SOAS ACE takes an explicit political economy framed approach to understanding and tackling corruption, and there have been a few efforts to provide more general information, such as the U4 Centre’s a workstream on the politics of anticorruption and the UK-based Governance and Social Development Resource Centre, but global coverage of relevant political economy research remains patchy.

To address this problem, I advocate the creation of a “Practical Politics Platform” where good quality, clearly explained political economy research is collected, curated, and presented in a form that is easy to search and freely available as a public good. It would be something like Our World in Data, but for practical political economy research. (To be clear, while corruption and anticorruption would be an important element of such a platform, the platform should more broadly integrate research on related issues, such as accountability, transparency, and public sector governance.) To increase user-friendliness, the platform could include clickable maps that allow users to focus on a country, and disaggregate the information, if desired, by sector and sub-unit. Continue reading →

Inside the Corruption Hunters Network

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Pursuing powerful officials for corruption is a lonely, often dangerous business. Presidents, ministers, and others at the apex of government don’t take nicely to being investigated, especially when they have come to believe that their office comes with a grant of impunity.  

Thanks to former French magistrate Eva Joly, whose pursuit of corruption among the French elite subjected her to ugly smear campaigns and threats to her safety, and the Norwegian Agency for Development Cooperation, a safe space has been opened for those on the trail of grand corruption. At Eva’s instance, Norad sponsors twice a year conferences where those on the hunt for high-level corruption meet to share stories, trade tips, and, most importantly, remind each other why what they are doing is worth the personal price they are paying.

Just how much the Corruption Hunters Network has contributed to the fight against corruption will never be known. But in a special edition on her podcast series, French lawyer and anticorruption activist Sophie Lemaître gives us a hint. In interviews, members explain how the Network has not only advanced work on individual cases but what being a part of a group with a common cause has meant to them both personally and professionally. (Other material on the Network here, here, and here.)

Guest Post: The Odebrecht Ruling and Prosecutorial Transparency in Brazil–A Rejoinder

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Two weeks ago, we published a guest post is from Professor Gregory Michener and Breno Cerqueira, based on an op-ed they had originally published (in Portuguese) in the Folha de São Paulo newspaper, concerning an important decision last by Justice Toffoli of the Brazilian Supreme Court. That decision nullified the evidence that Brazilian prosecutors had acquired from the Odebrecht firm as part of the agreement to settle the corruption charges against that firm; Justice Toffoli’s decision thus called into question ever subsequent corruption conviction that had relied on this evidence. That guest post prompted a response, which we published last week, from a Brazilian lawyer who took issue with many of the assertions that Professor Michener and Mr. Cerqueira had made in their piece. (The author of that post asked to remain anonymous. While GAB does not usually publish anonymous pieces, after considering the reasons for the anonymity request, I decided to grant it in that case.) Today’s guest post is from Professor Michener and Mr. Cerqueira, who offer a rebuttal to last week’s criticisms of their piece.

I realize that some readers may find this a bit excessive, especially since the issues here involve some fine technical points of Brazilian law. But in my view the issues are so important—going to the heart of one of the largest and most important anticorruption investigations in the world over the last decade (the “Car Wash” Operation)—and the legal issues are sufficiently difficult even for attentive outsiders to understand, that a thorough debate about what the most recent decision does and does not mean, that this exchange serves a useful purpose. I am grateful to all the parties involved for being willing to engage in this important conversation..

Without further adieu, here is Professor Michener and Mr. Cerqueira’s rebuttal to the criticism of their post on Justice Toffoli’s ruling:

The Odebrecht case spanned twelve countries and involved nearly a billion dollars of elaborate payments made from Odebrecht’s in-house bribery department to corrupt governments on three continents. (Perhaps the best way to understand the case is through the documents posted with the US Department of Justice press release about the settlement of the US Foreign Corrupt Practices Act charges in the case.)

The primary objective of our editorial was to discuss the deficient transparency of corruption cases in Brazil, an understudied aspect of corruption that should be of concern to citizens everywhere. Transparency of corruption cases can assign responsibility and promote accountability, deter graft among businesses and public officials, identify institutional weaknesses that need to be fixed and, perhaps most importantly, provide an important historical archive to keep the record straight – not only of crimes committed but of retributive government efforts in favor of the public interest. In the case of Brazil, we argued, a lack of transparency worked in favor of corruption and impunity, which is currently on the upswing.

We find it ironic that the critic of our article, a Brazilian lawyer (“Anonymous”), would ask for anonymity if his or her critiques were squarely fair handed and factual. (As an aside, anonymity is illegal as per the Brazilian Constitution (Article 5 IV – “the expression of thought is free, and anonymity is forbidden”). As a leading anticorruption specialist and friend commented on the Anonymous post a day after it appeared, it attempts to “muddy the waters.” Rather than “setting the record straight” it simply creates doubt where little should exist. The following explains why: Continue reading →