About Matthew Stephenson

Professor of Law, Harvard Law School

New Post, Featuring Nicola Bonucci

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Nicola Bonucci, currently a partner with the Paul Hastings law firm, who served for many years as the Director of Legal Affairs for the Organization for Economic Cooperation and Development (OECD). Our interview focuses primarily on the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions (sometimes referred to simply as the OECD Anti-Bribery Convention), which Mr. Bonucci was involved in creating and implementing. We discuss the history behind the convention, the reasons for its (relative) success, and also some of its current shortcomings. We also explore some of the current questions and challenges for this convention, including whether large emerging economies (such as China) ought to be brought into the convention, and how to enforce the convention’s requirement that enforcement of foreign anti-bribery laws shouldn’t be influenced by political or national economic considerations. Near the end of our talk, Mr. Bonucci reflects on his new perspective working with private clients addressing foreign bribery issues. 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: A Bleak Future for Indonesia’s Anticorruption Commission?

GAB is pleased to welcome back Sofie Arjon Schütte, Senior Advisor at the U4 Anti-Corruption Resource Centre, to contribute today’s guest post:

Indonesia’s Corruption Eradication Commission, known by its acronym KPK, was established during Indonesia’s reformation period in the early 2000s, and quickly became one of the world’s most powerful and independent anticorruption commissions. When the KPK began operations in 2004, a government regulation granted the agency substantial autonomy in its human resources management system, which the KPK used to ensure the integrity and competence of its staff. This control over personnel is considered good practice by international standards for anticorruption agencies, especially in environments where the existing state apparatus, and in particular law enforcement, is part of the corruption problem. And in Indonesia’s case, the KPK’s success in ensuring a competent and honest staff has been crucial to the agency’s track record of success—a track record that includes bringing more than 700 cases, the large majority of which resulted in guilty verdicts against members of Indonesia’s national and regional political elite.

But the KPK’s threat to vested interests has provoked strong resistance. This resistance has taken many forms, from judicial hostility, orchestrated demonstrations and threats, personal attacks on members of the organization, stalling the agency’s budget, and attempts to curtail its authority and autonomy through other legislative changes. The most devastating development was a new KPK Law, adopted in 2019, that was pushed through the legislature in rapid time without public input. This law effectively stripped the KPK of autonomy in important investigative functions and in its human resources management (here and here). Under the law, by September 2021 the KPK is to be integrated into the state apparatus, and its employees must become regular civil servants.

Allegedly as part of this process of integrating KPK employees into the regular civil service, the government recently required all KPK officials to take a specially concocted “national vision exam.” To be clear, neither the 2019 KPK Law nor its implementing regulations explicitly require such a test, which differs from the standard civil service entrance exam that all civil servants must take. Rather, this special test was developed by the National Civil Service Agency in collaboration with the Indonesian Armed Forces and Intelligence Service specifically to determine which KPK officers were radical and lacked neutrality and integrity and therefore presumably unfit for future civil service.

Seventy-five KPK employees failed this special exam. That may not seem like a big deal, both because 75 people amounts to less than 6% of the KPK’s current staff of over 1,300 employees, and because it might seem that failing a civil service exam is a reasonable ground for dismissal. But as the names of those who failed the test, and more details about the questions and the process, were made public, many critics have raised legitimate concerns. Indeed, even before the test was administered, the KPK employees’ union (which, by the way, will cease to exist after the conversion of the KPK into a regular civil service agency) warned that such a test could be misused to legitimize the marginalization or dismissal of KPK officers that handle strategic cases or hold strategic positions in the agency. And now that the results have come out, there are reasons to believe these fears were well-founded.

Continue reading

How Reliable Are Global Quantitative Corruption Statistics? A New U4 Report Suggests the Need for Caution

Those who work in the anticorruption field are likely familiar with the frequent citation of quantitative estimates of the amount and impact of global corruption. Indeed, it has become commonplace for speeches and reports about the corruption problem to open with such statistics—including, for example, the claim that approximately US$1 trillion in bribes are paid each year, the claim that corruption costs the global economy US$2.6 trillion (or 5% of global GDP) annually, and the claim that each year 10-25% of government procurement spending is lost to corruption. How reliable are these quantitative estimates? This is a topic we’ve discussed on the blog before: A few years back I did a couple of posts suggesting some skepticism about the US$1 trillion and US$2.6 trillion numbers (see here, here, here, and here), which were followed by some even sharper criticisms from senior GAB contributor Rick Messick and guest poster Maya Forstater.

This past year, thanks to the U4 Anti-Corruption Resource Centre, I had the opportunity to take a deeper dive into this issue in collaboration with Cecilie Wathne (formerly a U4 Senior Advisor, now a Project Leader at Norway’s Institute for Marine Research). The result of our work is a U4 Issue published last month, entitled “The Credibility of Corruption Statistics: A Critical Review of Ten Global Estimates.” (A direct link to the PDF version of the paper is here.)

In the paper, Cecilie and I identified and reviewed ten widely-cited quantitative estimates concerning corruption (including the three noted above), tried to trace these figures back to their original source, and assess their credibility and reliability. While the report provides a detailed discussion of what we found regarding the origins of each estimate, we also classified each of the ten into one of three categories: credible, problematic, and unfounded.

Alas, we could not rate any of these ten widely-cited statistics as credible (and only two came close). Six of the ten are problematic (sometimes seriously so), and the other four are, so far as we can tell, entirely unfounded. Interested readers can refer to the full report, but just to provide a bit more information about the statistics we investigated and what we found, let me reproduce here the summary table from the paper, and also try to summarize our principal suggestions for improving the use of quantitative evidence in discussions of global corruption: Continue reading

The “Big Government Causes Corruption” Zombie Shambles On

I don’t make a practice of responding to opinion columns in mainstream newspapers, especially when they’re not specifically or primarily about corruption. But the opening of Bret Stephens’ piece in yesterday’s New York Times caught my eye, mainly because the column used corruption in the Greek health care system as the “hook” for an argument that President Biden’s ambitious plans for an expanded social safety net will lead to American decline. Here’s how Stephens opens his column:

Years ago, Alexis Tsipras, the party leader of Greece’s Coalition of the Radical Left, surprised me with a question. “Here in the United States,” the soon-to-be prime minister asked me over breakfast in New York, “why do you not have this phenomenon of passing money under the table?”

The subject was health care. Greece has a public health care system that, in theory, guarantees its citizens access to necessary medical care.

Practice, however, is another matter. Patients in Greek public hospitals, Tsipras explained, would first have to slip a doctor “an envelope with a certain amount of money” before they could expect to get treatment. The government, he added, underpaid its doctors and then looked the other way as they topped up their income with bribes.

Take a close look at any country or locality in which the government offers allegedly free or highly subsidized goods and you’ll usually discover that there’s a catch.

What is the point of opening with this anecdote (other than not-so-subtly alerting the reader that the author is the sort of important person who has chit-chats with world leaders)? The implication, so far as I can tell, seems to be that countries that provide free or heavily subsidized social welfare benefits tend to be more corrupt.

There is, however, an important problem with this argument: It’s not true.

Continue reading

Guest Post: A Response to Commentary on the FACTI Panel Report and Recommendations

Today’s guest post is from Bolaji Owasanoye, the Chair of Nigeria’s Independent Corrupt Practices and Other Related Offenses Commission, and a member of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity (the FACTI Panel).

A few weeks ago, Professor Matthew Stephenson published two posts on this blog (see here and here) that offered some reactions to the report and recommendations of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity (the FACTI Panel), on which I served as a member. I want to first thank Professor Stephenson for his serious discussion of the report. Critical engagement on the Panel’s recommendations is very welcome, and indeed Panel members are keen to continue engagement with researchers, policymakers, and the wider public in order to accomplish our shared purpose: strengthened systems for financial integrity. Now isn’t the time for the lowest common denominator approach but instead for governments to be ambitious and thus unlock the large resources currently being drained aggressively from public finances.

Professor Stephenson generously concluded that “the FACTI Panel has done us all a useful service by providing a document that can serve as the focus for discussion and debate over this vitally important topic.” That said, on a few recommendations he called for more detail, and on an even smaller number he found what he considered as faults with the recommendations. It is on only some of these final few, and within my own area of expertise, that I want to respond to points Professor Stephenson raised. In particular, I want to explain my understanding of the Panel’s thinking in three areas: standards for settlement in bribery cases, strengthening asset recovery, and the use of escrow accounts.

Continue reading

New Podcast, Featuring Patrick Alley

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Patrick Alley, a director and co-founder of Global Witness. Global Witness, as many readers are likely aware, is a leading global advocacy organization focused on the inter-related issues of human rights violations, environmental degradation, and grand corruption. At the start of our conversation, Patrick discusses the founding of Global Witness and how his interest in environmental protection in developing countries like Cambodia led him, and the organization, to a greater focus on corruption and illicit financial flows. He then turns to a more in-depth discussion of how Global Witness seeks to raise awareness and prompt remedial action to address these and related problems, including the importance of forming effective–and sometimes surprising–partnerships 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–April 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. As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.

Guest Post: Lessons from Moldova’s Covid-19 Vaccine Distribution Scandal

Today’s guest post is from Valeria Ciolac, a member of the National Political Council of Moldova’s Party of Action and Solidarity, and a Youth Delegate of the Republic of Moldova to the Congress of Local and Regional Authorities of the Council of Europe.

Since the prospect of effective Covid-19 vaccines emerged last fall, experts have warned about the risks of corruption in the vaccine procurement and distribution process. Alas, in many countries these warnings proved prescient. My home country, the Republic of Moldova, is reeling from reports that politicians and local officials arranged for certain doses of the Covid-19 vaccine to be provided, in secret, to themselves, their family members, and their associates. Evidence of such corrupt misallocation first emerged last March, in the city of Edinet. But this was not an isolated incident. Over the last several weeks, it has become clear that even though the vaccine supply—which was procured only through donations and considerable effort—is supposed to be allocated first to high-priority groups, a group of seven hundred politicians, bank directors, restaurant owners, and others from around the country jumped in front of the line, leaving seven hundred medical workers behind.

When confronted with this evidence, the officials involved tried to explain away the diversion of the vaccines as legitimate use of excess supply. The Mayor of Edinet, for example, claimed that some medical workers chose not to get their vaccines right away, and the vaccines provided to politicians and their friends were surplus doses that would otherwise have been thrown away. But given the long history of public corruption in Moldova, and the resulting lack of trust in the state authorities, most Moldovan citizens doubt this explanation. It seems far more likely that in this case, as in so many other cases, politicians and well-connected individuals used their influence to secure vaccines that should have gone to those with greater need.

While it is tempting to conclude that such corruption is inevitable in a country like Moldova—the poorest country in Europe, and one that has long been immersed in corruption and negligence by the of public authorities—it is more useful to look closely at the Moldovan vaccine distribution system and ask whether things could have been done differently. And indeed, while there’s probably no way to prevent some degree of corruption in vaccine distribution, there are several measures that Moldova, and other countries in a similar situation, could have adopted, and should still embrace now, to minimize the risk of this sort of corruption. Continue reading

ASIL/World Bank/OECD Symposium on Supranational Responses to Corruption–Call for Papers

The Anti-Corruption Law Interest Group of the American Society of International Law (ACLIG), the World Bank’s Office of Suspension and Debarment (OSD), and the OECD’s Anti-Corruption Division are organizing a symposium on “Supranational Responses to Corruption,” tentatively planned to be held in person in Vienna, Austria on November 18-19, 2021, with the possibility to participate remotely. The theme of the symposium–which is described in greater detail here–is “supranational responses to corruption.” In other words, the symposium will focus on current and prospective anticorruption efforts that transcend national boundaries or governments. Themes of this symposium may include, but are not limited to:

  • Efforts that can transcend national boundaries or governments structures when it comes to generating and operationalizing anticorruption policies and measures undertaken by intergovernmental organizations, regional organizations, institutional investors, donors, and private sector firms;
  • Efforts to establish regional/global investigative, prosecutorial, and adjudicatory anticorruption institutions;
  • Efforts to enhance coordination and collaboration among the actors undertaking anticorruption efforts at the international level.

The organizers are inviting proposals for both full papers (minimum 5,000 words) and short essays (minimum 2,500 words) from scholars, private sector professionals, international organizations professionals, policymakers, public officials, civil society organizations, and the broader international anti-corruption community. The deadline to submit a proposal is May 15, 2021 (a month from today). A proposal should be between 250 and 500 words, and should indicate how the proposed paper or essay relates to the themes of the symposium. To submit a proposal, you should send it (together with a brief biographical statement) to acsymposium2021@gmail.com. Successful applicants will be informed by June13, and the deadline for submitting the full paper or essay will be September 25, 2021.

This sounds like a great event on an important set of topics, so I hope that many of you will consider submitting proposals!

New Podcast, Featuring Tommy Thomas

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Tommy Thomas, who served as the Attorney General of Malaysia in 2018-2020, and who in that capacity headed the investigation and prosecution of cases arising out of the so-called 1MDB corruption scandal. Our conversation covers both the 1MDB scandal and the broader political and economic circumstances that contributed to and facilitated this and similar sorts of corruption. We also discuss Malaysia’s anticorruption institutions, the factors that are most important to ensuring the independence and effectiveness of these institutions, and possibilities for reform. Toward the end of the interview, Mr. Thomas explains recent political developments, including those that led up to his resignation in early 2020, and also touches on the challenges of finding and recovering stolen assets. 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.