Day Two of the Trial of Teodorin Obiang

GAB is pleased to publish this account of the 2nd day of the trial of Equatorial Guinean Vice President Teodorin Obiang by Shirley Pouget and Ken Hurwitiz of the Open Society Justice Initiative

The defense suffered several significant setbacks at the second day of Equatorial Guinean Vice President Obiang’s trial for theft of public funds, money laundering, and other charges that together amount to kleptocracy.  As GAB earlier reported, Obiang’s lawyers sought to delay the case on procedural grounds and to block Equatorial Guinean citizens from, as French law permits, participating in the prosecution.  The court refused both requests.

Even worse for Obiang, the court displayed a detailed command of the allegations against him along with a determination to see they are presented at trial. Accusations that have appeared in the media, civil society publications, or elsewhere will now be tested in a formal, judicial proceeding.  A finding that they are true, that Obiang did indeed rob the citizens of Equatorial Guinea blind, cannot do anything but embolden courts elsewhere to pursue similar cases while confirming to the world the regime’s pariah status. Continue reading

The Disease of Corruption: How Distrust in Corrupt Governments Impacts Emergency Health Delivery

Corruption negatively impacts health outcomes. As noted in a previous post, corruption is associated with higher infant, child, and maternal mortality, overall poor health, the spread of antibiotic resistance, and many other problems. When we consider the reasons why corruption undermines health, the most obvious include things like theft or diversion of healthcare resources, or how demands for extra “informal” payments to healthcare providers can deprive poor communities of adequate care. There is, however, another important mechanism through which corruption undermines public health: corruption undermines trust in government and government-run services, which in turn can hinder effective health delivery and thereby escalate the spread of infectious diseases, especially in emergency situations like the recent Ebola crisis. Continue reading

Direct Democracy as the Solution to Corruption in Publicly Funded Sports Stadiums

In 2002, billionaire Jeffrey Loria purchased the Miami Marlins, a Major League Baseball team, for $159 million. In May of 2017, Luria agreed to sell the team for reportedly $1.3 billion, earning a profit of over $1.1 billion. Some of that profit can be explained by the increased valuation of all sports franchises in the last decade, but a large reason for the eye-popping jump in value is the Marlin’s new, privately owned—but largely public funded—stadium. In 2011, Miami-Dade County agreed to contribute more than $400 million for the stadium. Including interest, the estimated total cost to the county is $2.4 billion dollars. Prior to reaching a deal for the new stadium, Mr. Loria donated various amounts to local government officials, including $40,000 to the county commission chairman in 2008, and $50,000 to Mayor Alverez.  (The SEC conducted a four-year investigation into whether Loria’s donations were unlawful bribes, but ultimately dropped the investigation.)

Such a story is common in sports stadium construction. In the past 15 years, more than $12 billion in public money has been spent on privately owned stadiums. The loans used to pay for such construction, typically tax-exempt municipal bonds, will also cost the federal government at least $4 billion in taxpayer subsidies to bond holders. There’s an ongoing debate about whether taxpayer dollars should be used to fund privately owned stadiums, but that’s not my focus here. Rather, I want to focus on how this system creates opportunities for corrupt deals between team owners and local government officials.

Before government officials vote on whether to approve public funding for a new stadium, the team’s billionaire owners often make “campaign contributions” to the responsible government officials. It is difficult to prove that these donations are unlawful bribes, as doing so would require proving a quid pro quo exchange. Yet when billionaire owners donate to local government officials, who then happen to approve hundreds of millions of dollars in public funding for the billionaire’s stadium—which directly increases the value of the owner’s assets by hundreds of millions of dollars—it looks a lot like bribery. The example of Mr. Loria making donations to Miami-Dade officials is hardly unique. Consider the following additional illustrations Continue reading

In Defense of Judicial Elections

Many critics, including on this blog, have argued for abolishing judicial elections, partly on the grounds that judicial elections open the door to judicial corruption. These critics worry that elected judges cannot apply the law neutrally because they will be influenced by those who got them to their position and by the desire to stay there. But these risks are both exaggerated and fairy easy to control. Judicial elections actually promote legitimacy and responsiveness, and reduce opportunities for political gamesmanship. Ultimately, judicial elections can help curb judicial corruption.

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Tanzania’s President Magufuli Bulldozes the Civil Service: Is This an Anticorruption Breakthrough?

For decades (perhaps longer), the corruption problem in Sub-Saharan Africa has seemed intractable. With only a handful of exceptions (such as Botswana, and more recently Rwanda), Sub-Saharan African countries score poorly on measures like Transparency International’s Corruption Perception Index (CPI), and direct surveys of African citizens tend to confirm that the frequency of petty bribery, while both lower and more variable than some Westerners think, are much higher than in most other countries. Declarations of war on corruption have also been a feature of African politics for decades, to the point where both citizens themselves and outside observers have grown cynical about the will or capacity of leaders to clean up the system.

But there are some preliminary, hopeful signs that in at least some major Sub-Saharan countries, things may be starting to change for the better. The country that probably gets the most attention, at least among commentators outside of Africa, seems to be Nigeria, where President Buhari—a former strongman-style President whom some have characterized as a kind of “born-again” reformer—has made anticorruption a centerpiece of both his election campaign and his administration. (For some discussions of President Buhari’s anticorruption efforts, on this blog and elsewhere, see here, here, here, and here.) But to me—as a non-expert with only the most superficial knowledge of the region or its politics—the more interesting developments are actually occurring in Tanzania, under the administration of President John Magufuli. Continue reading

Reforming the ANDSF Payroll Management System: The Limits of a Technological Solution

In my last post, I discussed the how the problem of “ghost soldiers”—soldiers who are inaccurately listed as on active duty, for purposes of generating salary payments that are then stolen—adversely affects the capacity and readiness of the Afghan National Defense and Security Forces (ANDSF). To make things worse, not only is the government making salary payments to soldiers who don’t exist, but some ANDSF personnel who do exist are not receiving the full salaries they are due. Approximately 20% of Afghan National Police (ANP) and 5% of Afghan National Army (ANA) personnel are paid in cash through so-called “trusted agents,” who are supposed to facilitate salary payments to ANDSF personnel when electronic funds transfers (EFTs) are not possible, but according to reports, corruption in the system could take as much as half of an employee’s salary. And while most ANDSF personnel receive their salaries via EFT to their personal bank accounts, this only reduces the threat of pilfering in the final distribution stage; it does nothing to correct for errors, either intentional or inadvertent, generated earlier in the process.

What can be done about these problems? The U.S.-led multinational military organization working with the Afghan government to reform and strengthen the ANDSF, known as the Combined Security Transition Command-Afghanistan (CSTC-A), is applying a technological band-aid that focuses on implementing a set of computerized systems that track personnel and pay. While these measures are helpful, they do not fundamentally change the incentive structures that drive corruption, and so are unlikely to represent a long-term solution, particularly after direct U.S. involvement winds down.

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Lava Jato and Mani Pulite: Will Brazil’s Corruption Investigation End Up a Wash?

Pop quiz:

Which corruption investigation was preceded by a massive outcry against corruption, was advanced by federal prosecutors making liberal use of the plea bargain, implicated hundreds of politicians (including former and current heads of state), raised serious questions about the role of the independent judiciary, and ultimately resulted in a dramatic political crisis that led to the replacement of a long-standing populist regime with a conservative government bent on reform?

If you guessed Brazil’s Lava Jato (English: Car Wash), you’d be correct.

But if you answered Italy’s Mani Pulite (English: Clean Hands), you’d also be right.

The similarities between the two anticorruption investigations and subsequent prosecutions are no coincidence. In 2004, Brazilian Judge Sérgio Moro, currently responsible for Lava Jato, penned an essay praising the Clean Hands operation, calling it “one of the most impressive judicial crusades against political and administrative corruption,” lamenting Brazil’s failure to engage in a crusade of similar import, and setting a roadmap for the country to do so, based largely on the perceived successful tactics of Italy’s Clean Hands.

Over the last three years, Brazil’s Car Wash operation has followed Moro’s roadmap. But, as Alberto Vannucci has pointed out, Clean Hands was far from an unqualified success—on the contrary, the headline-grabbing, establishment-shaking operation arguably left the country even more mired in corruption than before. Last year, GAB contributor Daniel Binette (channeling Vannucci) predicted that Brazil could face three major challenges in the wake of Car Wash: (1) a collapse of major political parties, (2) the remote possibility of a coup, as occurred in Thailand in 2014, and (3) a loss of public confidence in the anticorruption probe itself. Some of Binette’s predictions have proven prescient, while the accuracy of others remains to be seen.

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