Patronage Wars: The Philadelphia Parking Authority Edition

Patronage hiring is a widespread practice throughout the world. While patronage has its apologists, its tendency to facilitate corruption makes it an undesirable phenomenon that should be rooted out. Patronage isn’t just a problem in poor countries—it’s also alive and well in rich countries like the United States. The recent scandal at the Philadelphia Parking Authority (PPA) is a case in point.

While the PPA may be famous across the country for its inspectors’ telegenic antics, in Philadelphia the PPA has long been known as a patronage mill dominated by Republicans. In December 2017, the Pennsylvania Auditor General released two separate reports blasting the PPA for closed hiring practices, inflated salaries, questionable spending and contracting, and pervasive sexual harassment. The reports place blame squarely on the former executive director, Vince Fenerty, Jr., who operated as an “unchecked tyrant.” Fenerty, who started out as a Republican ward leader, personally oversaw all hiring decisions at the PPA. Although the PPA has an HR department, no one ever checked up on applicants’ references or qualifications. In fact, Fenerty did not select applicants from the pool of those who submitted applications to the HR Department. As the Auditor General’s report put it, “the former Executive Director had other unknown means of obtaining applications.” He usually interviewed only one person per position.

The PPA’s utter ineffectiveness and shady practices meant that, between 2012 and 2017, $77.9 million was lost or uncollected. Revenue from the PPA goes to the chronically-underfunded School District of Philadelphia, meaning that Fenerty’s misbehavior also had a direct effect on Philadelphia schoolchildren, who missed out on the teachers, textbooks, and technology that $77.9 million could have funded.

How did things go so wrong for so long at the PPA, and what does this tell us about the problems with patronage hiring more generally? Continue reading

Rooting Out Malaysia’s Deep-Seated Corruption Requires Fundamental Political Reform

In a previous post, I wrote that to rebuild credibility and clean house in the wake of the 1MDB scandal, Malaysia needs to give the Malaysian Anti-Corruption Commission independent prosecutorial power. Even that much-needed reform, however, would leave Malaysia with a long way to go in its anticorruption efforts. The biggest obstacle to real improvement in Malaysia’s fight against corruption is not technical, but political: the chokehold that a single party—the National Front (Barisan Nasional or “BN”)—has on Malaysian politics.

The BN is a coalition party dominated by the United Malays National Organization (UMNO), and it has been in power since the 1970s. In a country with deep ethnic divisions, the party has managed to cling to power by perpetuating a far-reaching system of preferential treatment for the ethnic Malay majority. As a result, UMNO has a lock on the Malay vote – and therefore on general elections. Furthermore, Malay-owned firms get first priority for the award of government contracts, which perpetuates a culture of cronyism. UMNO leadership has a symbiotic relationship with an elite class of Malay businesspeople. On top of all this, districts in Malaysia are gerrymandered to give more weight to rural Malay areas. In the most recent general election, in 2013, the opposition party won the popular vote but did not win enough parliamentary seats to take power.

A party with a near-guaranteed place at the top has little incentive to clean up corruption. As visibly corrupt as UMNO may be, Malay voters are forced to weigh punishing UNMO corruption against preserving their privileges in every sector of life, from education to home-buying to business. Until there are significant changes in Malaysia’s political structure, anticorruption efforts are likely to be piecemeal and ultimately insignificant. A more structural change is required if there is to be any hope for rooting out corruption in Malaysia.

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Maybe Half-Measures Aren’t Half Bad: Reflecting on Ghana’s Anticorruption Progress

Ghana, like many countries in sub-Saharan Africa, has long struggled with serious public corruption problems. Yet there have recently been encouraging signs of progress. Back in 2009, during the administration of then-President John Atta Mills, Ghana began formulating an ambitious, long-term National Anti-Corruption Action Plan (NACAP) with 120 goals. After President Mills’ death, work on the plan continued under President John Mahama; although Parliamentary approval was not required, President Mills nonetheless submitted the final version of the plan to Parliament, which ultimately approved the plan in 2014. Commitment to the plan appears as strong as ever despite a change of party with the ascension of President Nana Akufo-Addo in January 2017.

Of course, lots of countries develop ambitious-sounding national anticorruption strategies, and in many cases these strategies don’t achieve much. (More cynical critics argue that these plans are often not intended to actually do anything other than to create the appearance that the problem is being taken seriously.) But according to a report released last fall by Princeton University’s Institute for Successful Societies, there are encouraging signs that Ghana’s anticorruption plan is working, despite some significant setbacks and limitations. Because those of us who work on anticorruption, especially in challenging environments, are so starved for good news and anxious for lessons learned, it’s worth considering some of the factors that seem to have contributed to the relative success of Ghana’s recent efforts. Continue reading

Fixing Everything But What’s Broken: Malaysia after the 1MDB Scandal

The Malaysian 1MDB scandal sparked the largest investigation in the history of the U.S. Department of Justice Kleptocracy Asset Recovery Initiative and has revealed serious problems with Malaysia’s anticorruption infrastructure. The DOJ has filed civil forfeiture claims for $1.7 billion in assets obtained with funds diverted from 1MDB, a sovereign wealth fund ostensibly intended to promote economic development in Malaysia. The money ended up in a stunning variety of locations around the globe. Nearly $700 million found its way into the Malaysian Prime Minister’s personal bank accounts. His stepson’s production company suddenly had the funds needed to back the Hollywood movie The Wolf of Wall Street. A financier with close ties to the government bought an Australian model jewels worth $8.1 million.

Meanwhile, the Malaysian government insists there is nothing to see here. The newly-installed Malaysian Attorney General cleared Prime Minister Najib Razak of all wrongdoing and put a stop to the investigation by the independent Malaysian Anti-Corruption Commission (MACC). As an earlier post explained, the previous Attorney General, who headed an inter-agency task force investigating the 1MDB scandal, resigned under suspicious circumstances, and Najib appointed his replacement. Najib also replaced several cabinet members who had called for investigations into 1MDB. The breakdown of justice in the 1MDB scandal may seem all the more surprising to outside observers, since Malaysia had appeared to be making strides in addressing its corruption problem, and the MACC—which was founded in 2009 and modeled on Hong Kong’s Independent Commission Against Corruption—had received fairly good reviews (see here, here, and here).

In the wake of the 1MDB scandal, there have been a variety of proposals for improving Malaysia’s anticorruption efforts. Most of these proposals, especially those emanating from the government, involve a flurry of activity and the creation of new anticorruption institutions. For example, the government has recently proposed creating a new National Integrity and Good Governance Department. The Malaysian Bar has called for the establishment of an Independent Anti-Corruption Commission (IACC) to provide oversight for MACC. The MACC itself, despite its inaction on 1MDB, is ramping up other anticorruption campaigns. This all fits an unfortunate pattern in Malaysia: creating lots of new agencies or new structures, or undertaking other actions that make the government “look busy,” but that don’t actually get to the heart of the main problem: the lack of a politically independent anticorruption prosecutor.  Continue reading