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.
I’m pleased to announce the launch of KickBack: The Global Anticorruption Podcast, a joint enterprise between myself (on behalf of the GAB team), and the Interdisciplinary Corruption Research Network (ICRN), represented in this venture by Nils Kobis and Christopher Starke. Our plan for this podcast is to feature regular interviews with leading voices in the anticorruption field, from academia, politics, activism, journalism, and elsewhere. We hope that, like GAB, the podcast will help to enhance serious debate and discussion about important issues in the field from a variety of different perspectives.
For our first episode, we are delighted to feature an interview with Yale Professor Susan Rose-Ackerman. (What better way to launch our anticorruption podcast than with the person who helped launch the modern economic analysis of corruption?) You can find this episode, along with a separate segment in which Nils, Christopher, and I introduce the podcast (and ourselves), in the following locations:
We hope that the podcast will also be available soon on iTunes.
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.
Today’s guest post is from Adriana Edmeades-Jones and Tom Walker of The Engine Room:
The abuse of anonymous companies to facilitate corruption, tax evasion, and other sorts of criminal activity has prompted reformers to call for corporations and other legal entities to provide governments with accurate information on the true (or “beneficial”) human owners of these companies. Transparency advocates have argued that governments should not only compile such beneficial ownership registries, but should make them public.Public beneficial ownership registries, according to their proponents, would increase the efficiency of financial investigations, ease the due diligence burden on companies investigating supply chains and corporate counterparties, and enable media civil society to scrutinize more effectively who owns and controls what among the global corporate elite. Opponents have advanced multiple objections to creating public beneficial ownership registries, including questions about their accuracy and effectiveness, as well as concerns about the effect on individual privacy, and the associated risks that such public registries could facilitate “identity theft, cybercrime, and blackmail.”
How seriously should we take the “personal privacy” objection to public beneficial ownership registries? In a new report, OpenOwnership, The Engine Room, and the B Team propose a framework to evaluate this issue, borrowing from the structured analysis of international human rights law. Crucially, under international human rights law not every interference with personal privacy qualifies as a violation of an individual’s privacy rights. A violation only arises if the interference with privacy lacks a legitimate justification. Determining whether an interference with privacy is justified, in turn, entails addressing three questions: (1) Is the interference lawful (that is, consistent with generally-accepted standards governing personal information)? (2) Is the interference necessary to advance some legitimate aim? (3) Is the degree of interference proportionate to the legitimate end sought?
Application of these three criteria in turn suggests that an appropriately-designed public beneficial ownership registry would not violate individual privacy rights: Continue reading
Although the United States has been a leader in the fight against global corruption in some respects—particularly in its vigorous enforcement of the Foreign Corrupt Practices Act and, at least until recently, its diplomatic efforts—there is widespread agreement in the anticorruption community that the United States has not done nearly enough to address the flow of dirty money, much of it stolen by kleptocrats and their cronies, to and through the United States. Effectively addressing this problem requires updating the US legislative framework, a task made difficult by the checks and balances built into the federal legislative process, coupled with high levels of political polarization. Yet there are reasons for cautious optimism: Thanks in part to skillful lobbying efforts by several advocacy groups, and aided in part by the Democrats taking control of the House of Representatives in the most recent mid-term elections, it looks as if there’s a real chance that the current Congress may enact at least some significant reforms.
Three of the reform bills under consideration are the subject of a hearing to be held tomorrow (Wednesday, March 13, 2019) before the House Financial Services Committee’s Subcommittee on National Security, International Development, and Monetary Policy. That hearing will consider three draft bills: (1) a draft version of the “Corporate Transparency Act” (CTA); (2) the “Kleptocracy Asset Recovery Rewards Act” (KARRA); and (3) a draft bill that currently bears the unwieldy title “To make reforms of the Federal Bank Secrecy Act and anti-money laundering laws, and for other purposes” (which I’ll refer to as the Bank Secrecy Act (BSA) Amendments). The subcommittee’s memo explaining the three proposals is here, and for those who are interested, you can watch a live stream of the subcommittee hearing tomorrow at 2 pm (US East Coast time) here.
For what it’s worth, a few scattered thoughts on each of these proposals: Continue reading
Since May 2017, GAB has been tracking credible allegations that President Trump, as well as his family members and close associates, are seeking to use the presidency to advance their personal financial interests, and providing monthly updates on media reports of such issues. The March 2019 update is now available here. A couple of the more notable new developments in this update:
As always, we note that while we try to include only those allegations that appear credible, we acknowledge that many of the allegations that we discuss are speculative and/or contested. We also do not attempt a full analysis of the laws and regulations that may or may not have been broken if the allegations are true. For an overview of some of the relevant federal laws and regulations that might apply to some of the alleged problematic conduct, see here.
There’s so much bad news in the anticorruption world these days that it’s hard to keep up. But I’ve recently been reading up on the ongoing debates in Europe over the selection of the first European Public Prosecutor, and I think this issue deserves some discussion, and even more attention from the anticorruption community in Europe and around the world.
Here’s the quick background for those who aren’t familiar with this issue: Back in 2017, 20 EU Member States agreed to create a new institution called the European Public Prosecutor’s Office (EPPO), headed by a European Public Prosecutor, with authority to investigate and prosecute (in national courts) offenses connected to the EU’s financial interests, such as fraud or embezzlement involving EU funds. (22 EU countries have now agreed to participate in the EPPO system.) The EPPO is scheduled to begin operations in late 2020 or early 2021, and the EU is in the process of selecting the first EPPO head. The three finalists are a Jean-Francois Bohnert of France, Andres Ritter of Germany, and Laura Corduta Kovesi from Romania. Ms. Kovesi had been considered a frontrunner, and still might secure the post, but her candidacy is under attack from her own government. Indeed, it seems that intense lobbying against her by the Romanian government is what led the Committee of Permanent Representatives in the European Union to back Bohnert for the job, though the European Parliament’s Committee on Civil Liberties, Justice, and Home Affairs voted to support Kovesi. The selection process is still ongoing, and it’s not clear when a final decision will be made. For those getting cold feet about Kovesi, though, it seems that the opposition of her home government is a significant reason.
In my view that’s not only wrong, but backwards. The Romanian government’s no-holds-barred, all-out attack on Kovesi is one of the best arguments for appointing her. I don’t know enough about the candidates to have a considered view of which of them, all else equal, would do the best job heading the EPPO, but assuming that they are all basically well-qualified, the Romanian ruling party’s panic over the prospect that Kovesi might get the job is exactly why she should be appointed, for two reasons:
Now, given that I just made those statements with what sounds like great confidence, and the rest of this post may adopt a similarly confident tone, I should immediately add the caveat that I am not an expert on Romania, I’ve never been there, I don’t speak the language, and all I know about the situation, as the old saying goes, is what I read in the papers. So if you want to say I don’t know what I’m talking about, fair enough, you have a point. But I’ve been reading a lot about this, and what I’ve read seems both sufficiently scary, and sufficiently clear, to merit comment. Moreover, I think the Romanian government’s strategy relies in part on non-experts feeling like they don’t really understand what’s going on, so that it starts to feel like that, in the face of conflicting narratives (a sort of he said/she said), it’s best just to avoid controversy by supporting a “safe” choice for EPPO head. We’ve got to resist that impulse. Appointing someone other than Kovesi may seem like the safe choice, but that’s exactly why Kovesi is the right choice. Continue reading
Today’s guest post is from Anton Moiseienko, a research analyst at the London-based Centre for Financial Crime and Security Studies of the Royal United Services Institute.
Investor citizenship and investor residence programs, known colloquially as “golden passport” and “golden visa” schemes, have a less than sterling reputation. Much of the disapproval comes from anticorruption organizations like Transparency International and Global Witness. Those two organizations published a joint report last year that criticized these programs for offering a “safe haven” to figures associated with corruption.
The European Union has also expressed concern about these programs in several of its Member States. For example, back in 2014 the European Parliament adopted a resolution that accused some Member States, in particular Malta, of an “outright sale of EU citizenship [that] undermines the very concept of European citizenship.” And this past January the European Commission published a report on golden visa and golden passport schemes that will do little to improve their battered reputation. The Commission report raises a number of worries about these programs, and expresses particular concern about golden passport programs, since citizenship in an EU Member State automatically confers EU citizenship with its attendant rights, including free movement.
There are at least three ways in which golden passport and golden visa programs threaten to undermine the fight against corruption. Continue reading
A few weeks back I was lucky enough to attend a mini-conference hosted by Rice University’s Baker Institute for Public Policy entitled “A Worthy Mission: Controlling Corruption in Latin America.” The conference featured an opening keynote address by Yale Professor Susan Rose-Ackerman, with a brief response by BYU Professor Daniel Nielson, followed by two panels. The first of these panels (which I moderated) focused on anticorruption prosecutions in Latin America generally, and featured Thelma Aldana (who served as Attorney General of Guatemala from 2014-2018, and is rumored to be a likely presidential candidate), Paolo Roberto Galvao de Carvalho (a Brazilian Federal Prosecutor and member of the “Car Wash” anticorruption Task Force), and George Mason University Professor Louise Shelley. The second panel, moderated by Columbia Professor Paul Lagunes, focused more specifically on corruption control in Mexico, and featured Professor Jacqueline Peschard (former chair of Mexico’s National Anticorruption System), Claudio X. Gonzalez (the president of the civil society organization Mexicanos Contra la Corrupcion y la Impunidad (MCCI)), and Mariana Campos (the Program Director at another Mexican civil society organization, Mexico Evalua).
Video recordings of the conference are publicly available, so I’m going to follow my past practice of sharing the links, along with a very brief guide (with time stamps) in case anyone is particularly interested in one or more particular speakers or subjects but doesn’t have time to watch the whole thing. Here goes: Continue reading
Today’s guest post is from Professor Ignacio A. Boulin Victoria of the Universidad Austral School of Law (Buenos Aires, Argentina) and Fulbright Scholar Eliana Kanefield.
Currently, over 3.9 million people work for the public sector in Argentina, constituting nearly 27% of Argentina’s workforce—the third-highest proportion in Latin America and the Caribbean (after only Barbados and Trinidad & Tobago), and well above the regional average of 18%. Working in the public sector in Argentina has substantial advantages, including strong employment security (it is extremely difficult to be fired from public sector positions in Argentina) and substantially higher salaries than comparable jobs in the private sector. It’s thus unsurprising that the competition for public sector jobs is fierce. To take just one example, when the Province of Mendoza created 114 new public sector positions, there were more than 30.000 applicants.
While there is nothing inherently wrong with the multitude of advantages public sector workers enjoy, this system gives rise to a structural problem: the system largely serves politicians’ friends and family. Officially, entry into the public sector is governed by a set of robust requirements and competitive examinations. But this is a façade. In reality, most people who get a job in the public sector do so because they have the right connections. They are usually friends, relatives, or members of the same political party of the person doing the hiring. An example of the clear disregard for the standards and systems in place is that, as of 2017, only 2% of senior management public sector employees had passed the “demanding” entry examinations and requirements designated by the government, and only 6% of these positions were filled through an open and fair recruitment procedure (compared to 90% in Chile). From 2015 to 2017, the proportion of senior public sector management positions filled by people who met the official professional requirements mandated by the job description decreased from 32% to 18%, while the proportion of these professionals who had education beyond a high school degree decreased from 72% to 66%. Admittedly, some of the public servants hired outside of the regular process do have the right qualifications, but even in those cases there’s still the inherent unfairness that potential applicants without connections don’t have the opportunity to compete for these jobs.
This failure of meritocracy worsens Argentina’s corruption problem, in three ways: Continue reading
Back when Donald Trump was first elected, a lot of people—me included—worried about the implications of his presidency for US leadership in the global fight against corruption. Some of the dire predictions have not (yet) come to pass; for example, so far US enforcement of the Foreign Corrupt Practices Act (FCPA) does not seem to have abated despite Trump’s well-documented and ill-informed hostility to that statute. But even if US enforcement of the FCPA has proceeded without much discernible effect (so far), there are other, less easily measurable respects in which the Trump Administration’s foreign policy, and its own cavalier disregard for ethics, may be undermining US leadership on anticorruption issues, and consequently undermining anticorruption efforts and bolstering those who would seek to undermine such efforts.
As just noted, much of this effect is diffuse and hard to observe directly, but there are a few examples where the Trump Administration and its allies are undermining the global fight against corruption is more evident. Perhaps the most striking and disheartening is the situation unfolding in Guatemala, ably documented in a compelling piece by Colum Lynch on Foreign Policy’s FP Blog earlier this month. Long story short: The Trump Administration and its allies in Congress appear to be supporting, or at least tacitly accepting, the efforts of Guatemalan President Jimmy Morales to shut down Guatemala’s UN-sponsored anti-impunity commission, known by its Spanish acronym CICIG, which has proved instrumental in fighting high-level corruption in Guatemala, and forced the resignation of President Morales’s predecessor, Otto Perez Molina. President Morales campaigned on an anticorruption platform, but he now wants to shut CICIG down, apparently because it’s investigating his own family members and associates. And the US, which had supported CICIG in the past and pressured President Molina to renew its mandate when he was inclined to terminate it to protect himself, seems to be backing Morales rather than CICIG.
I won’t go into all the details here, as the story is ably laid out in Mr. Lynch’s excellent piece. I’ll just highlight some themes that emerge from the reporting that Mr. Lynch and others have done, which illustrate connections—some direct, some indirect—between the Trump Administration’s approach to government and the dissipation of US leadership on anticorruption issues, as illustrated by the CICIG debacle. Continue reading
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