The Case for Engaging Religious Leaders in Anticorruption Efforts

The Kenyan Ethics and Anti-Corruption Commission (EACC) recently launched a somewhat unconventional initiative: an anticorruption Bible study guide. The EACC collaborated with the Evangelical Alliance of Kenya and the Fellowship of Christian Unions to first publish the guide in 2008, but in September it launched the guide’s use in a formal event with the Inter-Religious Sector. Though the EACC has worked with religious leaders from across traditions in the past, this guide is limited to the Christian faith. (Roughly 85% of Kenyans identify as Christian.) Intended for use in small group studies, the guide has 12 lessons divided into three sections: understanding corruption, developing values, and responding to corruption. Each lesson contains an introduction, discussion questions rooted in Scripture, a memory verse, and a final point of reflection. The EACC Twitter account declared that the study guide “is intended to help Kenyans interact with the Bible and discover God’s position on corruption and his direction on living a corruption free life.” And as the guide’s forward explains, “we believe that this fight will benefit from a much greater impetus if we use places of worship as the vanguard platform of advocacy against corruption in Kenya.”

Many in Kenya are not so sure. The decision to invoke God in the fight against corruption was met with skepticism and outright derision on Twitter and local media. (See here, here, and here.) Critics argued that the anticorruption Bible study guide would be ineffective (and therefore was a waste of resources), and also that anticorruption advocacy should be grounded in general morality, not religion. And it is hard to ignore the hypocrisy of religious groups and leaders speaking out against corruption given their imperfect records. (See here, here, and here). Furthermore, the collaboration between a government agency and religious leaders in producing this guide raises concerns both about the separation between church and state and about whether scarce government resources are best spent recruiting religious organizations into the anticorruption fight.

These criticisms are overblown. Working with religious stakeholders—and framing ethical arguments in religious terms—is a powerful and legitimate tool in the anticorruption movement’s arsenal, and activists should not shy away from using it. Religious leaders and organizations make particularly effective partners in anticorruption efforts for several reasons: Continue reading

Putting Elected Officials in Charge of Elections Is a Recipe for Corruption: Evidence from U.S. States

One of the stories that figured prominently in last November’s U.S. elections was that of Brian Kemp, then Georgia’s Secretary of State and now the state’s new Governor. As Secretary of State, Kemp was responsible for administering the state’s elections—but in 2018 he was administering the very election in which he was running for governor, which creates an inherent conflict of interest. Indeed, there was plenty of evidence that Kemp used his position as Secretary to increase his odds of winning the election: He attempted to close polling locations in neighborhoods likely to vote for his opponent, promulgated abnormally stringent voter registration rules that put thousands of voters’ eligibility into question, and launched what most observers considered to be a groundless investigation into his opponent’s campaign in the week before the election. Ultimately, after ignoring calls for him to recuse himself, Kemp announced that he would resign as Secretary of State two days after the election, while the votes were still being counted. Kemp was eventually declared the winner, though his opponent, Stacey Abrams, never fully conceded, vowing to sue Kemp for “gross mismanagement of the election.”

It’s hard to see how an election administrator’s use of his power to benefit his own political campaign is anything other than corrupt. Indeed, Kemp’s controversial election illustrates how the U.S. electoral process is particularly vulnerable to this sort of corruption. (And, it’s worth noting, while Kemp drew most of the attention, there were two other candidates in the 2018 elections that found themselves in the same position, with one choosing to recuse himself from the recount process back in August 2018 during a close primary.) In most U.S. states, the Secretary of State (who is responsible for administering the state’s elections) is an elected official, and in over half of the states, Secretaries of State can run for public office while serving as Secretaries. This is out of step with most of the developed world, where election administration is independent and apolitical. Reformers have called for changes to this system before, so far without much success. But the atmosphere may now be ripe for anticorruption advocates to propose referenda to create new, independent, and non-partisan systems for election administration. A well-designed system could eliminate the clear conflicts of interest raised by people like Brian Kemp, while also tackling the more insidious and less obvious forms of corruption that arise when party members use their power over election administration to ensure that their party stays in power.

What might such a system look like? Canada may provide a useful model, given its similarities to the U.S., particularly with respect to its federalist structure. In Canada, each province is responsible for administering its provincial elections, while the Canadian national government administers national elections. The Canadian election administration systems share a few key components that keep the electoral commissions independent and non-partisan, and that all U.S. states should adopt: Continue reading

Will 2019 Be the Year the US Finally Passes Anonymous Company Reform? Not If the ABA Gets Its Way

It’s a new year, a new US Congress, and a new opportunity for the United States to take action to close some of the most glaring loopholes in its anticorruption and anti-money laundering (AML) framework. So far, Washington has been consumed with the government shutdown fight, along with early chatter about who might seek the Democratic nomination to challenge Trump for the presidency in 2020, such that there hasn’t yet been much coverage of what new legislation we might see emerging from this new Congress over the next two years. And to the extent there has been such discussion, it has tended to focus on initiatives—such as the Democrat-sponsored “anticorruption” bills that focus on lobbying, voting rights, and conflict-of-interest law reform—that, whatever their usefulness in shaping the debate and setting an agenda for the future, have virtually no chance of passing in the current Congress, given Republican control of the Senate and the White House. Indeed, many commenters assume that on a wide range of issues, political gridlock and polarization means that the new Congress is unlikely to accomplish much in the way of new legislation.

That may be true as a general matter, but there are a few areas—including some of particular interest to the anticorruption community—where the opportunity for genuine legislative reform may be quite high. Perhaps the most promising such opportunity is so-called anonymous company reform. Anonymous companies are corporations and other legal entities whose true “beneficial owners” are unknown and often hard to trace. (The registered owner is often another anonymous legal entity registered in another jurisdiction.) It’s no secret that anonymous companies are used to funnel bribes to public officials, to hide stolen assets, and to facilitate a whole range of other crimes, including tax evasion, fraud, drug trafficking, and human trafficking. And although in the popular imagination shady anonymous shell companies are associated (with some justification) with “offshore” jurisdictions, in fact the United States has one of the most lax regulatory regimes in this area, making it ridiculously easy for kleptocrats and others to use anonymous companies registered in the US to shield their assets and their activities from scrutiny.

Of course it’s possible for law enforcement agencies, armed with subpoena power and with the assistance—one hopes—with cooperative foreign partners and sympathetic courts can eventually figure out who really owns a company involved in illicit activity, doing so is arduous, time-consuming, and sometimes simply impossible. It would be much better if there were a central register of beneficial ownership information, with verification of the information the responsibility of those registering the companies and stiff penalties for filing inaccurate information. Indeed, one of the striking things about the debate over anonymous company reform is how little disagreement there seems to be among experts about the benefits of a centralized company ownership register. There’s still significant controversy over whether these ownership registers should be public (see, for example, the extended exchange on this blog here, here, here, here, and here). But even those who object to public registers of the sort the UK has created acknowledge, indeed emphasize, the importance of creating a confidential register that’s accessible to law enforcement agencies and financial institutions conducting due diligence. But the US doesn’t even have that.

There’s a chance this might finally change. Continue reading

The Case for State-Level Anticorruption Prosecutions in the U.S.

In the United States, the federal government’s Department of Justice (DOJ) plays a huge role in the prosecution of state-level public corruption: Over the past five years, federal prosecutors have obtained the convictions of approximately 1,700 corrupt state and local officials for corruption-related offenses. Examples range from prominent and powerful figures like Sheldon Silver, the former Speaker of the New York State Assembly, to low-level functionaries like Eloy Infante and Elpidio Yanez, Jr., two former members of the School Board of Donna, Texas.

The federal government’s primacy in prosecuting state and local corruption is no accident. One of the stories of American law enforcement in the 20th century, especially though not exclusively in the anticorruption context, is the expanding role of the federal government, an expansion that was in part a reaction to the perceived deficiencies of state law enforcement. Most states in the U.S. elect both prosecutors and judges, and concerns that these elected officials were under-resourced, incompetent, partisan, or captured by local influence-peddlers contributed to the rise of federal criminal law enforcement. The federal government’s role in prosecuting state and local corruption blossomed in the 1970s, with regional U.S. Attorney’s offices taking the lead, supported by a new DOJ Public Integrity Section in Washington, D.C. The U.S. Attorney’s offices were considered more independent and less vulnerable to capture than local law enforcement, were generally better resourced than their state and local counterparts, and were able to focus those resources on picked cases.

This system has worked well and achieved considerable success. Many argue—with justification—that the federal government’s central role in prosecuting state and local corruption was instrumental in breaking the stranglehold of corrupt political machines at the subnational level. But today, it’s important for state prosecutors to do more to supplement, and in some cases perhaps supplant, federal anticorruption prosecutions. If the story of the 20th century was a distrust of states to police their own politicians, the early 21st century story may be that we can no longer completely trust the feds to do it either. There are three main reasons why, going forward, we may need to rely increasingly on the states:

Continue reading

Band-Aids Don’t Fix Bullet Holes: The West Virginia Supreme Court Needs To Address Its Corruption Problem

The headlines wrote themselves: a $32,000 couch (complete with $1,000 worth of throw pillows). A $10,000 payment to a private attorney to “ghostwrite” a court opinion. Illegal overpayments to former colleagues in the hundreds of thousands of dollars. Public outcry erupted in late 2017 when news broke that the justices on the West Virginia Supreme Court of Appeals (the highest court in the state) had spent lavishly on office renovations. Further investigations revealed that some justices had used state-owned vehicles and government credit cards for personal use. Three of the justices were accused of scheming to overpay retired judges who were contracted by the judiciary to fill in on the trial courts in times of vacancy or high caseloads. But the most brazen allegations were leveled against Chief Justice Allen Loughry, who was convicted of wire fraud and obstructing an investigation into his enriching himself at taxpayer expense—despite the modest fame and fortune he (ironically) earned as the author of a book on political corruption in West Virginia.

The pervasiveness and diversity of the misdeeds on the West Virginia Supreme Court of Appeals over the past few years suggest that the corruption was in many ways a cultural problem. But it’s worth noting that the most serious allegations of corruption were likely not actually criminal. A quirk in West Virginia’s law gave the Supreme Court near-total control over its own budget, paving the way for the unchecked spending. Likewise, the intentional overpayments to retired judges reeked of cronyism but may or may not have been illegal; while a statute capped payments to part-time judges, the judiciary still arguably retained ultimate control how and how much to spend.

In response to the revelations of corruption, West Virginia’s government settled on two aggressive solutions. First, in August 2018 the West Virginia House of Delegates approved 11 articles of impeachment against the four justices still on the court and scheduled trials for each of them before the State Senate to determine if they should be removed from office. (The normally five-member court was already down a justice, who resigned in July a few weeks before pleading guilty to federal fraud charges.) The impeachment proceedings were met with outrage by some commentators (see here, here, and here), who saw them as a partisan power grab. Questionable motives aside, the results of the impeachment charges were still a mixed bag: one justice resigned from the Supreme Court before her trial. Another was acquitted of all charges but formally censured by the State Senate in a lopsided vote. The other two justices escaped any impeachment trial after an interim slate of state Supreme Court justices threw out the impeachment charges against their fellow justices on technical grounds. Chief Justice Loughry resigned following conviction in federal court (that makes three resignations overall, if you’re keeping count), and the legislature backed down from further impeachments. Second, after the impeachments, West Virginia’s voters overwhelmingly approved a constitutional amendment that wrested control over the judiciary’s budget away from the Supreme Court, giving the legislature the power to cap the judiciary’s annual spending, so long as the total amount is no less than 85% of the previous year’s budget.

But even if these measures work precisely as planned, the problem in West Virginia is far from solved. The damage to the judiciary’s legitimacy has been severe. A common refrain states that judges “like Caesar’s wife, must not only be virtuous but above suspicion.” And Chief Justice Loughry—of all people—echoed this same bold claim in his book: “Of all the criminal politicians in West Virginia, the group that shatters the confidence of the people the most is a corrupt judiciary…. It is essential that people have the absolute confidence in the integrity and impartiality of our system of justice.”

Unfortunately, the remedies implemented thus far serve only the short-sighted goals of stopping yesterday’s corruption. What is missing in the aftermath of the West Virginia scandals is a concerted effort on rebuilding trust in the judiciary. As previous scandals in the public and private sectors suggest, regaining trust in the judiciary requires public remedial actions by the judiciary itself. Replacing certain justices and adding high level legislative oversight may have been appropriate, even essential, measures, but they don’t necessarily help the court restore its integrity and repair its tarnished reputation. Moreover, focusing exclusively on these externally-imposed remedies may send a signal that the judiciary can’t be trusted to handle its own affairs. This makes it all the more imperative that the judiciary take the initiative in addressing its cultural problem and rebuilding public trust in the courts. A willingness to accept responsibility for past mistakes and engage in transparent self-evaluation will be critical as the West Virginia Supreme Court begins its new term this month. In particular, there are two steps the Court could take that would be helpful: Continue reading

The Promise – and Risk – of Internationalizing the Corruption Fight: Prosecuting the Mozambique Loan Fraud

Manuel Chang, Mozambique’s longest serving Finance Minister, has just lost the first round in his attempt to duck U.S. charges he defrauded the Mozambique people out of some $2 billion.  A South African Magistrate ruled January 9 that Chang’s December 30 arrest in South Africa, requested by the U.S. Justice Department, was valid.  Assuming South Africa stands firm in the face of legal maneuvering by Chang and political pressure by the Mozambique government, Chang will join accomplices in a Brooklyn jail to await trial for corruption.

That the corruption trial of a former official of the one of the world’s poorest nations will be held in the courts of one of the world’s wealthiest and that the trial turns on the strength of a third country ’s legal system and the political resolve of its government shows both the promise – and the risk – of the internationalization of the fight against corruption. Continue reading

Technical Foul: When Anticorruption Enforcement In Sports Goes Too Far

From the U.S. federal government prosecuting FIFA officials in New York City to Transparency International both announcing an organizational initiative on sports anticorruption and publishing a 398-page report on the topic, it seems clear that governments and NGOs alike have deemed sports corruption a high priority. One can debate whether sports corruption is sufficiently important to merit this level of attention, though there’s a case to be made (as Lauren Ross argued on this blog a few years back) that sports’ broad appeal, media coverage, and status as a symbol for fair competition together give anticorruption efforts in sports an importance that exceeds the direct social harm caused by, say, match fixing relative to other forms of corruption (like medicine theft). That said, just because there may be special value to sports-related anticorruption initiatives in general doesn’t mean that all legally viable sports-related anticorruption enforcement opportunities should be pursued. Indeed, over-emphasizing sports can lead to a dubious allocation of government resources, a problem illustrated by a recent US case (United States v. Gatto) in which several defendants were convicted for their roles in a college-basketball bribery scheme.

To understand the Gatto case, it’s important first to understand the underground economy for student-athletes. In the U.S., the non-profit National Collegiate Athletic Association (NCAA) governs the $13-billion college sports industry, with most of the NCAA’s revenue coming from men’s college basketball. (If men’s college basketball programs could be bought and sold like professional sports franchises, the most valuable would be worth $342.6 million.) Critically, however, because of the NCAA’s amateurism rules, the student-athletes whose talent drives this industry can neither receive compensation from their universities (beyond cost-of-attendance athletic scholarships), nor earn money through endorsements, autographs, jersey sales, or any other monetization of their name or likeness. The value generated by the unpaid players is captured by others in this system, such as head coaches (who are the highest-paid public employees in 39 out of 50 states), NCAA executives, and university athletic directors. Given this system, it’s altogether unsurprising that top high-school basketball prospects often receive compensation for attending a given university via an underground economy. The corruption scheme at issue in Gatto was a particularly egregious example of this underground economy in action: Employees at an athletic-shoe company (Adidas), which sponsors a number of men’s college basketball programs, conspired with assistant coaches at those programs, and with an aspiring talent agent, to bribe elite high-school basketball prospects to attend the Adidas-affiliated universities. This deal looked to be win-win-win-win. The athletes benefited because they received compensation that better reflected their market value. Adidas benefited both from having elite college-basketball players wearing their brand on national television and from the increased probability that some of these players would sign an endorsement deal with Adidas if they turned professional. The universities profited from the economic windfall associated with enrolling an elite basketball prospect. And the aspiring talent agent boosted his odds of being formally retained when the player turned professional.

Nonetheless, this scheme was technically illegal, and so the jury was analytically correct in convicting the defendants at trial. But just because the defendants broke the law doesn’t mean that the prosecutors should have brought the case. Indeed, this case is one where, for three policy-related reasons, it would’ve been better if the U.S. Department of Justice hadn’t gotten involved: Continue reading