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Author Archives: Matthew Stephenson
Guest Announcement: New Basel AML Index Now Available
Kateryna Boguslavska, project manager at the Basel Institute on Governance, provides the following announcement:
Earlier this month, the Basel Institute on Governance released its annual Anti-Money Laundering (AML) Index; the public edition of this index, which draws on 18 separate indicators, ranks 152 jurisdictions according to each jurisdiction’s risks of money laundering and terrorist financing, and its capacity to counter those risks. (While the public edition is freely available, those interested in a more in-depth exploration of the data, for a larger number of jurisdictions, can sign up for the Expert Edition — also free for users outside the private sector.) The launch of the Basel AML Index was accompanied by a launch webinar, as well as a report. That report focuses on three important topics: virtual assets, confiscation of illicit assets, and the misuse of non-profit organizations for terrorist financing. This resource may be useful for many researchers who study corruption and illicit financial flows.
Guest Post: The OECD’s Report on Brazil Should Be a Wake-Up Call
Today’s guest post is from Guilherme France, the Research and Advocacy Manager at Transparency International Brazil and a PhD candidate at the Institute for Social and Political Studies at the State University of Rio de Janeiro.
The OECD Working Group on Bribery (WGB) conducts periodic reviews (in successive “phases”) on how well signatories to the OECD Convention on Preventing Bribery of Foreign Public Officials. Recently, the WGB published its Phase 4 report on Brazil. The picture it paints is rather bleak, and should be a wake-up call for Brazilian citizens and, one hopes, the Brazilian government. While the WGB also acknowledged some improvements in Brazil’s anticorruption framework (such as better inter-institutional cooperation, an increase in funding for law enforcement agencies, and efforts to enact a stronger whistleblower protections), Brazil is underperforming with respect to enforcement, and backsliding with respect to institutional independence. Continue reading
New Podcast Episode, Featuring Panel Discussion on Professional Enablers
A new episode of KickBack: The Global Anticorruption Podcast is now available. This episode features a panel discussion on the role of so-called “professional enablers” (including lawyers, accountants, consultants, and others) in facilitating corruption, illicit financial flows, money laundering, and related activities. The panelists–Robert Barrington, Guy Beringer, Liz Dávid-Barrett, Tena Prelec–discuss the meaning of the “professional enablers” term, distinguish legal from illegal functions, and discuss the types of corruption-related activities that these service providers might facilitate. The panelists provide a variety of case examples from around the world, focusing particularly on the legal profession, and discuss potential responses, including highr professional standards.
You can also find both this episode and an archive of prior episodes at the following locations:
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KickBack was originally founded as a collaborative effort between GAB and the Interdisciplinary Corruption Research Network (ICRN). It is now hosted and managed by the University of Sussex’s Centre for the Study of Corruption. If you like it, please subscribe/follow, and tell all your friends!
Guest Post: Corporate Transparency Is Easy
Today’s guest post is from Gary Kalman and Annalise Burkhart, who are, respectively, Executive Director and Program & Research Associate for Transparency International U.S.
Readers of this blog know well that anonymously owned companies are the go-to vehicle for laundering illicit funds. From the revelations of hidden assets exposed in the Panama Papers to the search for sanctioned assets of Russian oligarchs, anonymous corporate structures enable corrupt and criminal actors to steal, hide, launder and benefit from illicit proceeds with impunity. The anticorruption community therefore cheered when the U.S. Congress passed the Corporate Transparency Act (CTA), requiring the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to collect beneficial ownership information for U.S. companies and align with international standards.
As the Treasury Department is finalizing its rules for implementing the CTA, the law’s opponents have been engaged in a campaign of scaremongering aimed particularly at small businesses, with various memos, articles, and notices warning of a burdensome reporting process, uncertain or unclear disclosure requirements, and the risks of hefty fines and possible jail time for business owners who might inadvertently fail to file the appropriate information.
These claims are exaggerated, inaccurate, and misleading. Instead of providing helpful guidance to small businesses, these alarmists are stoking fear among business owners, likely to mobilize political opposition to the effective implementation of the CTA. Here are the facts: Continue reading
New Podcast Episode: In the 101st Episode, Hosts Reflect on the 100th Episode!
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Guest Post: The Brazilian Supreme Court’s Erroneous Nullification of the Car Wash Evidence
Today’s guest post is from Eduardo Carvalho, a Brazilian prosecutor from the State of Rio de Janeiro.
There has been a great deal of commentary in the Brazilian and global anticorruption community – including on this blog (see here, here, and here) – on a recent decision by Supreme Court Justice Dias Toffoli concerning important evidence on which Brazilian prosecutors relied in securing numerous convictions in the so-called Lava Jato (Car Wash) Operation. The evidence in question—principally files stored on computer disks—was obtained from the Odebrecht company as part of settlement agreements with Brazilian, Swiss, and US authorities. Justice Toffoli, expanding on a previous ruling by Justice Lewandowski, found that this evidence was obtained in violation of Brazilian laws on international cooperation and evidence handling, and therefore could not be used in court. As a result, an enormous number of Car Wash convictions are likely to be nullified. From an anticorruption perspective, this is a disaster, undoing years of hard work and allowing scores, perhaps hundreds, of corrupt politicians to go free.
But according to Adonis Brozoza’s post last week on this blog, the responsibility for this lies with the prosecutors, not the Justices. Mr. Brozoza argues that the prosecutors, in their zeal to secure corruption convictions, ignored relevant laws and procedures on international cooperation and evidence handling. This sloppiness, he maintains, so compromised the reliability of this crucial evidence that the Justices were obligated, under the relevant Brazilian laws, to rule this evidence inadmissible.
Respectfully, this assertion is both legally questionable and factually incorrect. While I do not impugn the good faith of either the Justices or Mr.Brozoza, careful attention to the relevant laws, and to what the relevant authorities actually did, demonstrates that Justice Toffoli’s ruling ought to be overturned by the full Court. Continue reading
Special 100th Episode of the KickBack Podcast
- What is one thing about corruption that you’ve changed your thinking on in the past 10 years?
- What is the most significant development — positive or negative — in relation to corruption and corruption studies over the past thirty years?’
- Michael Johnston: 2:34
- Leena Koni Hoffmann: 7:52
- Alina Mungiu-Pippidi: 10:24
- Paul Heywood: 12:51
- Florencia Guerzovich: 15:40
- Joseph Pozsgai-Alvarez: 18:16
- Jorge Alatorre: 21:36
- Delia Ferreira Rubio: 23:33
- Matthew Stephenson: 26:55
- Susan Rose-Ackerman: 29:43
- John Githongo: 32:15
- Jon Quah: 33:34
- Laode Muhammad Syarif: 36:12
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Corruption, Extremism, and the Crisis in Israel: Some Tentative Thoughts on Possible Connections
Since the terrorist organization Hamas’s mass murder and kidnapping of Israeli civilians ten days ago, I’ve been finding it difficult to think about anything other than the news from Israel/Palestine. Like many of you, I’ve been spending a lot of time (probably too much) doom-scrolling, worrying about my friends in the region, and anxious about about what will happen next. A lot of people, including university professors and those who have public platforms of some kind, have been weighing in on various aspects of this conflict. I have been hesitant to do so, because I have basically no professional expertise in the most important dimensions of the current crisis (such as the politics and history of the Middle East, military strategy, international humanitarian law and the law of war, etc.). What I write about on this platform is corruption, and the current crisis in Israel has little to do with corruption.
Little, but not nothing. At the risk of engaging in an all-too-common form of academic narcissism (“Look how this biggest important news event relates to the narrow topic I happen to study!”), I did want to offer some brief and tentative thoughts on how corruption, and the response to it, may have played a minor but notable role in precipitating the current crisis.
I’m not going to say much here about corruption on the Palestinian side. In an insightful post from back in June 2021, GAB contributor Magd Lhroob addressed aspects of this issue, noting both how Hamas’s initial electoral success back in 2006 may have had more to do with the perception that the Palestinian Authority (PA) was hopelessly corrupt, and also how the growing frustration of ordinary Gaza residents at Hamas’s corruption strengthens Hamas’s incentives to foment violence with Israel. Here I want to say a few words about corruption issues on the Israeli side, particularly the corruption charges against Prime Minister Netanyahu. Continue reading
The U.S. Approach to Corruption in Ukraine: Change or Continuity?
[A quick note: I drafted the post below last week, before the horrific events in Israel over the weekend. I have nothing useful to say about that tragedy–I have no expertise in military or security policy, Middle Eastern politics, terrorism, or anything along those lines. But I wanted to express my deepest sympathy to those who have been affected by Hamas’s horrific and inexcusable attack on innocent civilians. I will continue to write posts on assorted corruption-related issues, like the one below, because that’s what I know and that’s what I do. But this is one of those moments when other things seem so much more important. Am Yisrael Chai.]
Last week, a piece in Politico discussed the contents of a confidential (but not classified) U.S. State Department’s “integrated country strategy” for Ukraine; a shorter public version of that strategy document was released last August, but the version Politico obtained was longer and more detailed. The big headlines coming out of the Politco story (both literally and figuratively) concern corruption. The U.S. strategy document, Politico notes, “sees corruption as the real threat,” and “warns Western support may hinge on cutting corruption.” The Politco story made a bit of a splash among some of the people who follow these issues closely, but I don’t think it tells us much that we didn’t already know, and the new material from the confidential version of the report, so far as I can tell from Politico’s reporting, mainly concern political calculations that are basically common knowledge, though perhaps a bit sensitive for the U.S. government to declare formally in a public document.
Let me start out by noting one thing that I think the Politico piece gets exactly right, and that poses a general, and by now familiar, challenge to those who both support Ukraine’s resistance to Russian aggression and believe anticorruption reforms are vital for the country’s future success. As the Politico story puts it:
The [Biden] administration wants to press Ukraine to cut graft … [b]ut being too loud about the issue could embolden opponents of U.S. aid to Ukraine, many of them Republican lawmakers who are trying to block such assistance. Any perception of weakened American support for Kyiv also could cause more European countries to think twice about their role.
This is indeed a real issue, and a rhetorical and political challenge. Having said that, I think the Politico story, perhaps inadvertently, may simultaneously (1) understate the extent to which the U.S. government has already been willing to publicly raise the need for serious anticorruption reforms in Ukraine, and (2) overstate the extent to which the U.S. is relying on a coercive approach (mainly express or implied aid conditionality) to press for such reforms. A few thoughts on each: Continue reading