Author Archives: Richard Messick

UNCAC Coalition to UNCAC State Parties: Ensure Corruption Victims Can Recover Damages

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As Carlos Guerrero explained here last week, corruption is anything but a victimless crime. Citizens are injured or killed when corruptly constructed buildings collapse on them. Others are denied the right to education, life saving medical treatment, and the fair resolution of their disputes thanks to bribery, embezzlement, and conflicts of interest.

The drafters of the United Nations Convention Against Corruption were not blind to the tremendous damage corruption does to identifiable persons or groups of persons. That is why they included a specific provision making it absolutely clear that all parties must grant victims of corruption an opportunity to seek compensation for any injuries sustained. In no uncertain terms article 35 requires state parties to open their courts to any individual or entity injured “as a result of an act of corruption.”

But UNCAC state parties have yet to take article 35 seriously. Academics, civil society organizations, and the UN Office on Drugs and Crime all report that only a few victims in a handful of states have recovered damages. In the vast majority of the 190 countries that have ratified the Convention, not a single person injured by corruption has been compensated for their loss.

The UNCAC Coalition‘s Working Groups, a global network of over 350 civil society organizations in 100 countries, is demanding change. The parties to UNCAC meet this December in Atlanta to review each other’s progress in complying with the convention. Below is the Coalition’s letter to them urging that compliance with article 35 by all 190 be a priority.

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Guest Post: Forcing States to Grant Corruption Victims Legal Standing

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Today’s guest post is by Carlos G. Guerrero Orozco, a Mexican litigation lawyer and partner at López Melih y Estrada Abogados. He chairs the non-profit Derechos Humanos y Litigio Estratégico Mexicano and heads the International Database Taskforce at the Working Group on Victims of Corruption of the UNCAC Coalition.

Corruption is what social scientists call a “wicked problem,” one extraordinarily difficult to solve because of its complex and interconnected nature. Governments thus need all the help they can muster to tackle it. But too many sideline a critical ally, those harmed by corruption.

Corruption’s victims are many and their injuries diverse. Journalists threatened, and too frequently murdered, for revealing corrupt schemes. Whistleblowers attacked for denouncing corruption. Citizens injured or killed when corruptly constructed buildings collapse; those denied access to education, health care, and fair courts thanks to bribery, embezzlement, and other corruption crimes.

All are victims and all have real claims for damages and strong incentives for joining with governments to fight corruption.

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Lankan Civil Society and IMF Staff: Allies in Sri Lanka’s Fight Against Corruption

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Sri Lanka is recovering from one the worst bouts of kleptocratic rule in modern times. That recovery crucially depends of course on ending its rulers’ wholesale theft of the nation’s resources, an effort where the International Monetary Fund staff and Sri Lankan civil society have wittingly or unwittingly joined forces.

The alliance has Its roots in events of 2022. That spring citizens had had enough. With the economy cratering and poverty skyrocketing, they joined to force the latest in a string of kleptocrats from office (pictured here). That summer the replacement government pledged to fight corruption. That fall IMF staff recommended approval of a $2.9 billion loan to help the country dig out of the hole corruption dug.

Sri Lanka’s corruption was so blatant, and the link between it and the economy’s free fall so clear that IMF’s staff insisted that in return for the loan the government promise to enact a program “reducing corruption vulnerabilities through improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework, and conducting an in-depth governance diagnostic, supported by IMF technical assistance.”   

One year on, as the IMF board considers whether to release a second tranche of the loan, that promise remains unfulfilled.  The evidence is in two reports released in September, one by Sri Lankan civil society (here) and the other by the IMF staff (here). Both chronicle the government’s numerous failures to implement promised reforms. Both point the same underlying problem: the impunity high level officials continue to enjoy.

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U.S. Prosecutors Newest Addition to Their Anticorruption Toolkit

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For more than three decades the U.S. Justice Department has sought ways to pressure American corporations to police their executives, employees, and consultants. To see that they take measures to see those they employ don’t pay bribes, rig prices, or commit other crimes. Shown above is pictorial representation of its latest tool.

It shows a crab gripping a stack of hundred dollar bills with its claw. That is precisely what the Justice Department expects a corporation to do if it discovers someone in its employ has paid a bribe, fixed a price, or committed another serious crime to advance the corporation’s interest. The company is to clawback monies paid the miscreant.

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Inside the Corruption Hunters Network

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Pursuing powerful officials for corruption is a lonely, often dangerous business. Presidents, ministers, and others at the apex of government don’t take nicely to being investigated, especially when they have come to believe that their office comes with a grant of impunity.  

Thanks to former French magistrate Eva Joly, whose pursuit of corruption among the French elite subjected her to ugly smear campaigns and threats to her safety, and the Norwegian Agency for Development Cooperation, a safe space has been opened for those on the trail of grand corruption. At Eva’s instance, Norad sponsors twice a year conferences where those on the hunt for high-level corruption meet to share stories, trade tips, and, most importantly, remind each other why what they are doing is worth the personal price they are paying.

Just how much the Corruption Hunters Network has contributed to the fight against corruption will never be known. But in a special edition on her podcast series, French lawyer and anticorruption activist Sophie Lemaître gives us a hint. In interviews, members explain how the Network has not only advanced work on individual cases but what being a part of a group with a common cause has meant to them both personally and professionally. (Other material on the Network here, here, and here.)

Mozambique Government Announcement of Settlement of Hidden Debt Claims Against UBS

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Mozambique’s citizens are the victim of likely the most egregious corruption scandal of the 21st century. As explained on GAB and numerous media accounts (here, here, here, and here), employees of Swiss banking giant Credit Suisse together with Mozambique government officials, and Middle East ship-building company Privinvest put the country’s government on the hook for $2.2 billion in loans for projects of little or no value. Citizens of one of the word’s poorest nations are now stuck repaying them.

Some of the only good news to come out of this enormous crime was the Mozambique’s government decision to bring suit against Credit Suisse, Privinvest, and some of the other perpetrators in London (complaint here). A favorable judgment could not only result in cancelling the debt but an award of damages. Damages because of the enormous hit the Mozambique economy took when the loans, hidden because they were taken out in violation of an IMF bailout loan, were finally revealed.

Earlier today the Mozambique government announced it had settled with UBS, which assumed Credit Suisse’s liability when it took the bank over. On its face, the settlement appears to be a very good deal for UBS. Whether it is a good one for the citizens of Mozambique remains to be seen.

Mozambique’s Prosecutor General disclosed some of the terms in a press conference earlier today in Maputo. According to an on-scene report,

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The Sometimes Grubby World of Political Fundraising

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The recent bribery charges levelled against New York City Building Commissioner Eric Ulrich remind of the corruption risk the private financing of political parties and candidates creates.

Ulrich raised money for Eric Adams’ successful campaign for New York City Mayor, and after his election Adams appointed him to a position in the city’s Department of Buildings. As the New York Times explained in its story on the charges, “the department regulates the construction and real estate industries, issuing permits, licensing contractors and policing construction safety and the city’s building code, and thus can have a significant impact on development.”  According to the indictment, Ulrich accepted more than $150,000 in bribes in return for granting licenses and permits.

The corruption risk private campaign financing creates arises from candidates’ search for money to win their election. One needs lots of money to get elected Mayor of New York (Adams’s raised more than $9 million.) That in turn requires people willing to help raise it from friends and associates. Some help knowing that if the candidate they are helping wins, they can use the relationship they have developed with the candidate and senior campaign staff to make money. 

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Virtual Seminar September 6: Mozambique’s Hidden Debts — Trials of Perpetrators, Lessons Learned

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Wednesday, September 6, at 2:30 PM Mozambique time (UTC + 2) members of Mozambican civil society, the media, and GAB staff member (me) will discuss developments in the Mozambican “hidden debt” scandal.

Evidence introduced at the trial of Jean Boustani (here), a senior executive of the Middle East shipbuilding company Privinvest, showed the company bribed Mozambican officials to the tune of $125 million in return for government loan guarantees. The loans went for projects of little or no value. Mozambican citizens are now saddled with repaying billions in principal and interest. A joint study by Mozambique’s Centro de Integridade Pública and Norway’s Chr. Michelsen Institute estimates the scheme may have cost the nation, one of the world’s poorest,. as much as $11 billion, virtually the country’s entire GDP for 2016.

Those responsible for this enormous wrong are slowly being held to account. The Mozambique government is suing some of the perpretrators in a civil action in London, and Manual Chang, Finance Minister at the time the guarantees issued, was recently extradited to the United States to face charges for his role.

A list of speaker and details on logging in on Zoom is here.

Guest Post: Curbing Political Finance Abuse in Moldova

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GAB is pleased to welcome this post on political finance in Moldova by the Independent Anti-Corruption Advisory Committee. Established by reformist President Maia Sandu in 2021, the committee reports regularly on Moldova’s progress in curbing corruption and what more needs to be done. Thanks to its members expertise and their independence, its work carries great weight — both within Moldova and the international community.

The most recent report addresses perhaps the most challenging issue any democracy faces: enforcement of the rules governing contributions to and expenditures by political candidates and political parties. A challenge all the greater in Moldova as post-Soviet oligarchs have yet to be fully tamed and Russia continues to pour black money into campaigns to strengthen anti-Ukraine, pro-Russian candidates.

The report is here, the committee’s summary below.

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Ukraine’s Fight Against Corruption: Whistleblowing

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Last Friday, July 7, some 50 civil society representatives, media personnel, and government policymakers spent the day discussing the law and practice of whistleblowing in Ukraine. They heard from among others National Anticorruption Prevention Committee (NAPC) officials explain how whistleblowing fit into the government’s anticorruption efforts, Anticorruption court Judge Oleksiy Kravchuk on measures for fostering respect for whistleblowers, and how the law protected Oleh Polishchuk after he blew the whistle on his employer’s corruption.

I spoke at the closing panel with TI Ukraine head Andrii Borovyk and Serhiy Derkach, Deputy Minister for Community, Territories and Infrastructure Development of Ukraine. The English version of the program is here and the slides I spoke from here. Minister Derkach’s closing remarks are below —

“Whistleblowing during the recovery process in Ukraine is even more important. It is not only about corruption but also about the security and efficiency of how funds and resources are used.

“There are three key conditions for whistleblowers to report wrongdoing:

✔️ Official channel for reporting
✔️ Confidence that the reports will be reviewed and the perpetrators brought to justice
✔️ Protection from retaliation by management

“At the Ministry of Renovation, we support a zero-tolerance culture towards corruption and are actively working to implement an effective compliance system.

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