Monthly Archives: October 2026

State “Decapture”: The Moldovan Story

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The tiny, post-Soviet nation of Moldova has long been considered the paradigmatic case of state capture. Since independence the country has been beset by weak institutions coupled with a deep cleavage over national identity. These conditions have made it easy for government leaders to put the state’s machinery to use to enrich themselves, their relatives, and cronies. In common parlance, to capture the state.

But an amazing turnaround has been underway since 2021. A new pro-Western party, the Party of Action and Solidarity, came to office and with the support of the European Union began taking measures to free the state machinery from elite control. To decapture it if you will.

Liam O’Shea chronicles the decapturing in new report for the Global Initiative Against Transnational Organized Crime (here). Senior figures from earlier administrations – among them a former president and a former prime minister — have been prosecuted for corruption; judges and prosecutors vetted; anti-corruption bodies empowered, and new and tighter controls put on political finance.

“Centralized state capture,” O’Shea writes, “no longer exists. . . . Criminal actors no longer obtain political protection, no evidence has surfaced since 2021 of collaboration between senior political figures and organized crime, and the state constrains these markets more effectively than at any point in the post-Soviet period.”

“Decapture” may today be a nonce word, but anticorruption activists can hope that with more examples like Moldova it will soon take its place in English dictionaries.

Multistakeholder Exchange: Corruption Linked to Organized Crime, 27 October 2026

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The links between organized criminal gangs and corruption is a topic of growing concern. At the instance of the permanent missions to UNODC of Italy and Mexico, an online and in person meeting to gather input from civil society is being organized by UNODC October 27.

It will be at the UNODC office in Vienna, 11 a.m. to 12:30 p.m. Central European Time. All welcome to attend.

Invitation with details here. Draft proposed conclusions here.

TI-US to FinCEN: Don’t Abandon the Crypto Mixer Rule

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Under the Biden Administration, FinCEN, the agency that writes and enforces U.S. anti-money laundering rules, proposed a rule aimed at cracking down on the use of foreign cryptocurrency mixers (Convertible Virtual Currency mixing services in money laundering parlance). Mixers obscure the source, destination, or the amount of a crypto transaction. That makes them a go-to tool for ransomware gangs, sanctions evaders, corrupt officials, and drug traffickers (here).

U.S. law requires anyone taking custody of customers’ funds — as mixers must do to mix — to register with FinCEN and verify customers’ identities. This defeats the purpose of mixing. As a result, no U.S. company openly operates a mixer, and those who have run one covertly have been prosecuted for money laundering and related federal crimes.

But while many countries are cracking down on mixers, not all are. So Americans with something to hide can still find a foreign service to route their crypto through.

To make that less likely, the Biden-era proposal would have required any U.S. financial institution to report within 30 days of detection any transaction it “knows, suspects, or has reason to suspect” involved mixing in a foreign jurisdiction. On October 6, the Trump Administration withdrew that proposal, along with a 2020 proposal requiring reporting on crypto transfers to and from self-hosted wallets (here). Both proposed rules would have made it harder for Americans, and anyone dealing in U.S. dollars, to hide their crypto dealings.

On October 8 Transparency International’s U.S. chapter sent FinCEN a strongly worded, well-argued letter urging it to reinstate the Biden-era proposals and to take further steps against the abuse of digital assets. A copy of the letter is here.

Addressing Institutional Corruption: International Selection Commissions in Ukraine:

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GAB is pleased to welcome this Guest Post by David Bernstein, an international development consultant and lawyer who spent more than 30 years working on rule of law, governance, and anticorruption programs at the State Department, the EBRD, and the World Bank. He recently served as one of the three international commissioners on the Selection Commission for the Head of Ukraine’s State Customs Service (SCS).

Our Commission was tasked with identifying two candidates to head the SCS from a list of finalists we were given. After interviewing the first few, my fellow international commissioners and I worried that we would be hard pressed to find even one to recommend to the Finance Minister and the Cabinet of Ministers; our potential dilemma was the Customs Code required us to name two. Fortunately, in the end we did find two, both investigators from the National Anti-Corruption Bureau (NABU): Ruslan Damentsov and Orest Mandziy. On April 10, 2026, the Cabinet, acting on the Finance Minister’s recommendation, appointed Mandziy as head of the SCS (the decision is here; the government’s announcement is here). Damentsov accepted the post of deputy head.

Ukraine pioneered the use of international experts to help select the heads of national agencies (here). Over the past several years, international experts have played a key role in selecting the heads of NABU, the Specialized Anti-Corruption Prosecutor’s Office, and the Economic Security Bureau, as well as the judges of the High Anti-Corruption Court (here). Ukrainian civil society, many members of the Verkhovna Rada, and key international donors believe that international participation in selection commissions can help combat systemic corruption in key institutions and build or sustain public trust in anticorruption and law enforcement agencies. This post describes how the process worked, why it was possible, and what lessons my experience on the SCS Selection Commission offers for the future.

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Italy’s Highest Court Quashes Conviction of Corruption Prosecutors: “Il fatto non sussiste”

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“The offence does not exist” (il fatto non sussiste). With those words, Italy’s Corte Suprema di Cassazione has righted a grave injustice done to Fabio De Pasquale and Sergio Spadaro.

The two Milan prosecutors were charged with withholding evidence that bore on the credibility of a key witness in their bribery prosecution of oil giants ENI and Shell. By failing to make it available to the defence, the charge went, they had committed the crime of refusing to perform official duties.

From the outset the case looked, as the decision says, “deeply flawed” and “legally untenable.”  Some of the material merely repeated what was already in the record, some was of doubtful reliability, and some the defense counsel acknowledged they already had. Many assumed the charges were brought to stop the two from appealing the trial court’s acquittal (despite strong evidence of wrongdoing). Insiders expected that once a new prosecutor took over the appeal (who then promptly dropped it – leaving defendants scot free) – the charges would be dismissed.

They were not. To the surprise even of some involved in the initial investigation, the case went to trial, De Pasquale and Spadaro were convicted, and the Brescia Court of Appeal upheld the conviction.

Italy’s Supreme Court has now vacated it. It held that neither of the statutes the lower courts relied on in finding the two guilty obliged them to disclose the material, and it called the appeal court’s reasoning “assertive and one-sided.” The conviction was quashed on the ground of il fatto non sussiste. That is the strongest formula available, and it generally carries the greatest preclusive effect in any later civil or disciplinary proceedings.

The case has done great harm not only to De Pasquale and Spadaro but to the reputation of the Italian judiciary. Will those in power now act to repair the damage, both to the two men and to the system itself?

The decision (in Italian) is here; an English translation by DeepL Pro is here.