About Matthew Stephenson

Professor of Law, Harvard Law School

New Podcast, Featuring Elizabeth David-Barrett

After our holiday hiatus, I’m pleased to announce that a new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, my Interdisciplinary Corruption Research Network (ICRN) colleagues Nils Kobis and Christopher Starke interview Elizabeth David-Barrett, Professor of Governance and Integrity and Director of the Centre for the Study of Corruption at the University of Sussex. In the interview, Professor David-Barrett discusses the concept of “state capture,” the mechanisms by which corrupt actors may capture the state, and the new forms of state capture that have been emerging in many countries, as well as how the concept of state capture relates to lobbying and machine politics. Later in the interview, she addresses various questions related to anticorruption reform measures, including the unintended consequences that some well-intentioned reforms might sometimes have, and where up-and-coming researchers can make the most valuable contributions to the anticorruption struggle. You can also find both this episode and an archive of prior episodes at the following locations: KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Anticorruption Bibliography–January 2022 Update

An updated version of my anticorruption bibliography is available from my faculty webpage. A direct link to the pdf of the full bibliography is here, and a list of the new sources added in this update is here. Additionally, the bibliography is available in more user-friendly, searchable from at Global Integrity’s Anti-Corruption Corpus website.

As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.

Do Individual U.S. Senators Manipulate the Timing of FCPA Enforcement Actions? (Spoiler: No.)

Is enforcement of the U.S. Foreign Corrupt Practices Act (FCPA) improperly politicized? The notion that it is has gained traction in some circles, particularly in countries with multinational firms that have been sanctioned by U.S. authorities for FCPA violations, such as France and Brazil. The usual claim by those who assert that FCPA enforcement is politicized is that the US Department of Justice (DOJ) deploys the FCPA as a kind of protectionist weapon against foreign multinationals that compete with US firms. But a recent working paper by two business school professors (one American and one Chinese) claims to have found evidence for a different sort or FCPA politicization. According to this paper, individual U.S. Senators exert behind-the-scenes influence over the DOJ to manipulate the timing of FCPA enforcement actions against foreign corporations. More specifically, the paper argues that when a Senator is up for reelection, he or she will influence the DOJ to announce an enforcement action against a foreign company before, rather than after, the election. Doing so, the authors suggest, helps the Senator’s reelection chances by imposing a cost on a foreign company that competes with domestic firms in the Senator’s state.

I confess that when I first saw this paper a few weeks ago, I didn’t take it too seriously, because the central argument seemed so obviously detached from reality. (I also didn’t have time to dig into the details of the empirical methods, which are somewhat involved.) But the paper seems to generated a bit of buzz—including a Tweet from one of the best and most respected economists who works on corruption-related issues, which specifically asked me and a few others for our reactions to some of the “provocative” evidence presented in the paper. So I took a closer look. Continue reading

Anticorruption Bibliography–December 2021 Update

An updated version of my anticorruption bibliography is available from my faculty webpage. A direct link to the pdf of the full bibliography is here, and a list of the new sources added in this update is here. Additionally, the bibliography is available in more user-friendly, searchable from at Global Integrity’s Anti-Corruption Corpus website.

As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.

Guest Post: France Continues to Modernize its Procedures for Fighting Global Corruption—and Has Some Interesting New Ideas

Frederick Davis, a member of the New York and Paris Bars and a Lecturer in Law at Columbia Law School, contributes today’s guest post:

As recently as a few years ago, posts in this space by me and others bemoaned the striking inability of French authorities to prosecute French companies involved in global corruption. In the first fifteen years after France criminalized overseas bribery (thereby meeting its obligations under the OECD Convention on Combatting Bribery for Foreign Officials that France had signed in 1997), not a single French company had been convicted of this crime. This was attributed to the difficulty of pinning corporate criminal responsibility on corporations, as well as to limits in French criminal procedures that rendered its prosecutors unable to move as quickly, efficiently, and effectively as their U.S. counterparts. French deficiencies included the lack of both “sticks” (the credible threat of significant sanctions) and “carrots” (the ability to offer a deferred prosecution agreement (DPA) in exchange for self-disclosure and cooperation). The result: a number of iconic French companies reached negotiated outcomes with the U.S. Department of Justice (DOJ), and paid well over US$2 billion in fines and other payments to the U.S. government.

Resisting populist demands for retaliation, France instead changed its criminal procedures and enforcement institutions to address the challenge. The most notable changes include the creation of a National Financial Prosecutor’s Office with nationwide responsibility for many economic crimes, the creation of the French Anti-Corruption Agency to enforce compliance regimes, and the passage of the so-called Loi Sapin II, which increased penalties for financial crimes and introduced a French-style DPA called a Judicial Convention in the Public Interest. In addition to these reforms, France’s highest court has clarified the laws on corporate criminal responsibility, and in an unprecedented decision ruled that a parent or successor corporation remains criminally responsible for acts of an acquired entity even the acts took place prior to the acquisition.

The results of these reforms have been nothing short of remarkable: Continue reading

Guest Post: What Should Brazil’s Next President Do To Get the Anticorruption Agenda Back on Track?

Today’s guest post is from Marcelo Malheiros Cerqueira, a Brazilian federal prosecutor and a member of the GAECO/MPF (Special Action Group for Combating Organized Crime) in the state of Minas Gerais, Brazil.

Since 2019, Brazil´s anticorruption efforts have been disrupted and derailed. Institutions in charge of fighting corruption are being constantly weakened or attacked. Tools that have been central to Brazilian prosecutors’ anticorruption investigations, such as plea bargains and leniency agreements, are being dismantled by new legislation, and the Congress has not moved forward on proposals that would enhance the fight against corruption (see here and here). The judiciary, mainly by its Supreme Court, has have nullified convictions, or sometimes entire investigations, in major corruption cases, and in so doing has weakened the anticorruption system (see some examples herehere and also here). And despite the fact that anticorruption was a central theme of the 2018 presidential campaign, the government has been questioned for lending its support to pushback against the anticorruption agenda and politicizing formerly non-partisan bodies like the Federal Police.

While the backlash against Brazil’s anticorruption efforts is a three-branch problem, Brazilian voters have an opportunity to address at least one aspect of the problem next year, when they go to the polls to select Brazil’s next president.

This brings us to the question: What should the next Brazilian president do, whoever he or she may be? To put this question another way, when voters and civil society organizations are assessing the future presidential candidates’ anticorruption platforms, what sorts of policies and proposals should they look for? While the issue is obviously quite complicated, here are four initial proposals, from the simplest to the most difficult to implement:

  • First, the president needs to demonstrate a commitment to integrity as a core values of the administration—and must do so not simply through rhetoric, but by taking practical action such as refusing to appoint individuals implicated in corruption cases to senior government positions and pushing for the adoption of integrity measures at lower levels of the bureaucratic hierarchy. Doing so will not only help ensure integrity in the Federal government, but will also set a positive example for state governors and mayors, and help foster a culture of integrity more broadly in the society.
  • Second, the president should respect and empower the institutions of the anticorruption system, avoiding any risk of their political capture. This requires that the appointment of directors for bodies such as the Financial Activity Control Council (COAF), the Federal Police, and the Comptroller General of the Union (CGU) be guided by non-partisan technical criteria, instead of making appointments on the basis of political alignment or personal relationships. Likewise, the next president should restore the longstanding tradition of choosing the Prosecutor General of the Republic (PGR) from the list of three candidates previously voted by the members of the Federal Prosecution Office. This model is ideal for guaranteeing the autonomy of the PGR, which, in turn, is essential for the criminal investigation and prosecution of higher-ranking political agents (including the president) for possible acts of corruption.
  • Third, the president must commit to working to enact legislative and constitutional reforms that decrease impunity for acts of corruption, such as the proposed constitutional amendments to allow incarceration of defendants after the first affirmation of a conviction in an appeal´s court (rather than allowing convicted defendants to remain at liberty until all possible appeals are exhausted) and end to the “privileged forum” rule that says high-level public officials can only be tried in higher courts. On the other hand, the president must also oppose—and if necessary veto—any attempt by the Congress to inhibit the action of anticorruption bodies or to weaken existing anticorruption tools (as unfortunately occurred recently with respect to amendments to Brazil’s Administrative Misconduct Act).
  • Fourth, the most difficult anticorruption challenge facing Brazil’s next president will be reforming the Brazilian electoral system, which is a root cause of the grand corruption that recent investigations have exposed. Any attempt to change the electoral system will face strong opposition by influential politicians, whose power relies in rules that ensure expensive campaigns and unequal distribution of the public electoral fund. Thus, the president must spearhead the attempt to reform the political system—but should probably only do so when he or she has sufficient high public approval, probably after the implementation of the other three proposals mentioned above.

This short list obviously does not encompass all the possible measures that can be taken by the next president against corruption. It would be helpful to know what GAB readers think about these suggestions, as well as what other proposals they might suggest.

One last word. Political leaders can do a lot to help the anticorruption agenda. But that does not mean that societies depend exclusively on them. Good education, transparency, popular control, high standards of morality and many other factors are crucial to the success of the fight against corruption. Therefore, although the central question posed here brings the opportunity to debate the role of the president, civil society also needs to take care of its role.

New Podcast Episode, Featuring Casey Michel

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview the American journalist Casey Michel about his new book, American Kleptocracy: How the U.S. Created the Greatest Money Laundering Scheme in History. In our conversation, Casey and I touch on a variety of topics raised by his provocative book, including the dynamics that led to the U.S. and U.S. entities playing such a substantial role in facilitating illicit financial flows (including the nature of American federalism, the broad exceptions to the coverage of U.S. anti-money laundering laws, and the role of U.S.-based “enablers” of illicit finance), the challenges of regulating lawyers and law firms, the role and responsibilities of universities in light of concerns about “reputation laundering” by kleptocrats and others, the impact of the Trump and Biden Administrations in this area, and the challenges of generating and maintaining bipartisan/nonpartisan support for fighting kleptocracy. You can also find both this episode and an archive of prior episodes at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Guest Post: Five Observations on the New US Strategy on Countering Corruption

For today’s guest post, GAB is pleased to welcome back Robert Barrington, professor of practice at the University of Sussex’s Centre for the Study of Corruption.

Earlier this week, in the run-up to the Summit for Democracy, the US government launched its first-ever national anticorruption strategy, a move that was widely praised by advocacy groups such as Transparency International and the FACT Coalition. Indeed, the promulgation of this US “countering corruption” strategy document may turn out to be one of the most significant outcomes of the Summit, even though it preceded the Summit itself.

Only time will tell how much of an impact this new strategy document will make, but here are five initial observations: Continue reading

Guest Post: New OECD Anti-Bribery Recommendation Introduces Standards on Non-Trial Resolutions

Today’s guest post is from France Chain, Elisabeth Danon, and Sandrine Hannedouche-Leric, legal analysts at the OECD’s Anti-Corruption Division. The views expressed in this post do not necessarily represent those of the OECD member countries or States Parties to the OECD Anti-Bribery Convention.

The OECD Anti-Bribery Convention, which came into force in 1999 and currently has 44 member states, is intended to combat bribery of foreign public officials in international business transactions. Last month, the OECD Council adopted the 2021 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions, which includes—among other measures to further enhance the fight against transnational bribery—a section on non-trial resolutions (NTRs). This section, which is based in part on the findings of a 2019 report on NTRs from the OECD’s Working Group on Bribery in International Business Transactions, represents the first time that a multilateral instrument included standards on the use of NTRs to resolve foreign bribery cases.

The Recommendation first calls for Convention member states that have not yet adopted an NTR instrument to consider doing so. (This call follows the Working Group’s finding, in its 2019 report, that in the 27 OECD Convention member states that have developed at least one form of NTR instrument, nearly 80% of foreign bribery cases that have been successfully resolved since the Convention entered into force were resolved via NTR.) The Recommendation also stresses, however, that member states should take measures to ensure that the use of NTRs follows the Convention’s principles of “due process, transparency, and accountability” The Recommendation fleshes this out by advancing eight principles. According to the Recommendation, Convention member states that make use of NTRs should: Continue reading

Guest Post: Connecting the Two Worlds of Anticorruption and Human Rights Activism

Today’s guest post is from Casey Kelso, a human rights and integrity consultant currently serving as Senior Advocacy Officer for Worldwide Initiatives for Grantmaker Support (WINGS), and Servaas Feieretag, an independent consultant on integrity and anticorruption who currently serves as the lead expert on the MATRA for enhancing the efficiency, accountability and transparency of the Judicial Council of North Macedonia .

The link between human rights and anticorruption has been much discussed over the past decade (see, for example, here and here), yet anticorruption activists often do not recognize themselves as human rights defenders, while human rights activists often fail to understand corruption as a human rights issue. In order to highlight the interconnections between the international anticorruption movement and the international human rights movement, the UN’s Special Rapporteur on Human Rights Defenders, Mary Lawlor, has decided that her next report to the Human Rights Council in March 2022 will focus on threats to human rights defenders working directly on anticorruption issues. As she put it to us in a recent interview, “This issue of corruption comes up again and again in my conversations with human rights defenders, whether anticorruption work is the main focus of what they do or not.”

Corruption can cause or facilitate human rights violations in a host of ways. To illustrate with just a few examples: Continue reading