Category Archives: Commentary

U.S. Department of Justice/Civil Society — 1; Kleptocrats — 0

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October 10, 2014, deserves mention in any future history of the anticorruption movement, for it was on this date that a ruling kleptocratic family (colloquially known as thugs in power) conceded the obvious: that the money to fund a kleptocratic lifestyle — in this case a mansion in Malibu, a Ferrari 599 GTO, and Michael Jackson memorabilia – did not come from the family’s hard work on behalf of the citizens they rule.  Rather, it came the easy way: from the wholesale theft of the nation’s patrimony.

This startling, if obvious, concession came in the settlement of a civil suit filed by the U.S. Department of Justice, with the support and encouragement of civil society, against an unlikely group of defendants.  In the order listed in the complaint, they are: 1) One White Crystal Covered Bad Tour Glove and Other Michael Jackson Memorabilia, 2) One Gulfstream G-V Jet Airplane Displaying Tail Number VPCES, 3) Real Property Located on Sweetwater Mesa Road In Malibu California, 4) One 2007 Bentley Azure, 5) One 2008 Bugatti Veyron, 6) One 2008 Lamborghini Murcielago, 7) One 2008 Rolls Royce Drophead Coupe, 8) One 2009 Rolls Royce Drophead Coupe, 9) 2009 Rolls Royce Phantom Coupe, and 10) the Ferrari 599 GTO.

Although defendants stood mute before the court, their owner, Teodoro Nguema Obiang Mangue, Second Vice President of Equatorial Guinea and (surprise?) son of the country’s president, was anything but.  Through the mouths of expensive American legal talent he complained loudly and bitterly that the ten named defendants were innocent.  But in settling the case, he agreed in effect that three – the mansion, the Ferrari, and some of the Michael Jackson memorabilia, were indeed guilty.  Guilty? Of what? Continue reading →

Is Corruption Partly Responsible for the Ebola Crisis?

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There’s been an interesting mini-debate over at the FCPA Blog about whether, or to what extent, corruption is partly responsible for the severity of the Ebola crisis in West Africa. Richard Cassin, the publisher and editor of the FCPA Blog, argued that it is. He made this argument initially in a post from this past August entitled “Ebola tragedy is also a story of graft.” He offered as evidence the following observations: (1) the WHO and other observers estimate that a very high percentage–perhaps up to 25%–of global spending on public health is lost to corruption; (2) the very high Ebola fatality rates in West Africa have been attributed in part to the lack of adequate intensive care facilities to administer the treatments; and (3) the countries hardest hit by the Ebola outbreak–Guinea, Liberia, Sierra Leone, and Nigeria–are reputed to be highly corrupt, as indicated by their very poor scores on Transparency International’s Corruption Perceptions Index.

Many critics who commented on Cassin’s initial post complained that the evidence offered did not in fact support the strong claim in the title that corruption has contributed significantly to the Ebola outbreak. In particular, the critics pointed out that: (1) the fact that a great deal of public health spending generally is lost to corruption does not actually tell us whether corruption was a major factor in the particular case of the Ebola outbreak, and (2) the low ranking of the affected countries on the CPI likewise–even if we concede that the CPI is a decent measure of actual corruption–does not indicate that corruption caused (in any significant way) the Ebola outbreak to be as lethal as it has been; at most it shows a correlation that might be explained by any number of other factors.

Cassin responded with a second post last month in which he rebutted the critics. He acknowledged that while one can never establish with “scientific certainty” that corruption has a causal effect on the severity of the Ebola outbreak, there is powerful circumstantial evidence that corruption is a “gateway” to this and other public health crises (as well as other problems like terrorism and crime), because it siphons off public resources. Cassin cites to a couple of research papers that purport to show that corruption in general has adverse impacts on public health, in particular because it adversely affects access to clean water and sanitation.

While I’m generally sympathetic to Cassin’s larger point, I think that the criticisms are fair ones. Here’s my take. Continue reading →

An (Un)Appealing Argument: Why Bob McDonnell Shouldn’t Get His Hopes Up

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If former Virginia Governor Robert McDonnell is certain of anything, it’s that he never actually abused the powers of his office for the benefit of Jonnie Williams. Forget about the $170,000 or so in loans and gifts Williams extended to Virginia’s first family; “McDonnell’s last line of defense,” as Rick has noted, “[is] that the favors he did for Williams were not part of his official duties as governor.”  In other words, McDonnell believes that his influence peddling on behalf of Williams — in return for Williams’s financial “assistance” — did not amount to “the performance of an official act,” as required by federal bribery law.

Unfortunately for McDonnell, the judge overseeing his trial disagreed and refused to instruct the jury — as McDonnell had requested — that “merely arranging a meeting, attending an event, hosting a reception, or making a speech are not, standing alone, ‘official acts.’”  Instead, Judge Spencer adopted the prosecution’s understanding that federal bribery law encompasses quid pro quo arrangements involving the performance of either (1) a public official’s statutory duties or (2) those settled practices “‘that a public official customarily performs’ even if they are not prescribed in law.”  Not to be deterred, the former Governor thinks he has a strong case for challenging this instruction on appeal.  Here’s why he’s wrong.

Continue reading →

Some Encouraging Signs from the Recent White House Statement on Global Anticorruption

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A couple of weeks ago, the White House published a “Fact Sheet” on the U.S. Global Anticorruption Agenda. Though I don’t normally ascribe all that much importance to documents like this — they’re mostly for PR, after all — there were a few things about this particular release that caught my eye, and that I found fairly encouraging.

Perhaps most notably, although the release includes some obligatory–and deservedly self-congratulatory–discussion of the U.S. leadership role in enforcing the Foreign Corrupt Practices Act and pushing for stronger enforcement of anti-bribery laws through the OECD Convention, most of the Fact Sheet focuses on what many in the anticorruption community have emphasized as important, cutting-edge issues that go beyond traditional anti-bribery law, including:

  • Asset recovery and anti-money laundering as a top priority (including the recognition of the need to close loopholes in U.S. law and strengthen international cooperation in this area);
  • Closely related to this, the Fact Sheet emphasizes the importance of preventing the abuse of anonymous shell companies–including a discussion of recent regulatory initiatives on this front that we’ve noted elsewhere on this blog.
  • A special focus on the extractive sector
  • Emphasizing the importance of engagement and cooperation with the private sector, in particular the announcement of an intention to develop a “National Action Plan to promote and incentivize responsible business conduct, including with respect to transparency and anticorruption, consistent with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines on Multinational Enterprises.”

Of course, concrete action matters more than high-minded general statements, and I know many in the anticorruption activist community have reasonable concerns about whether the U.S. is prepared to do what it takes to make good on these pledges. Still, one must give credit where credit is due–not only to the U.S. government, but to the civil society activists and others that have succeeded in changing the conversation about global anticorruption in ways that are reflected by the White House document.

One other quick thing to note about the Fact Sheet: At one point it declares that the U.S. government “will hold responsible governments that tolerate or commit corrupt practices in contravention of international norms, including by adjusting our bilateral relations and advising our businesses and investors accordingly.” It’s not clear what, exactly, this means. Maybe it means nothing significant. But if the U.S. is serious about “adjusting [its] bilateral relations” with countries that tolerate or contravene international anticorruption norms, that might actually represent a significant departure from past practice. After all, though the U.S. routinely condemns corruption, I’m not aware of any cases in which another country’s failure to adhere to anticorruption norms has had broader collateral consequences for U.S. foreign policy toward that country. Again, maybe this doesn’t really mean much–what does “adjusting” relations mean, anyway?–but it would be interesting to see whether the U.S. (or perhaps some in the U.S. who had a hand in drafting the Fact Sheet’s language) want corruption concerns to start to play a role perhaps more similar to concerns related to human rights abuses.

Developing States Should Demand that Firms Doing Business with Them Have an Anticorruption Compliance Program

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In December 2008 the U.S. federal government instituted its Contractor Code of Business Ethics and Conduct program.  Since then, any firm awarded a contract of $5 million or more requiring at least 120 days to perform must establish within 90 days of the award an anticorruption compliance program that i) contains a written code of business ethics and conduct, ii) trains employees on ethics and compliance periodically, and iii) has an internal control system able to discover improper conduct.  The rules also require that the program be overseen by someone of “sufficiently high level [with] adequate resources to ensure [its] effectiveness.”  When a review found government agencies were not systematically checking their contractors for compliance, the regulations were amended to require the government employee responsible for contract execution to verify that the contractor had an anticorruption compliance program in place.

No developing state now imposes any similar requirement on those with which it contracts — at least according to interviews with development agency procurement staff and internet searches.  But there is no good reason why developing countries should not mandate such a program and good reasons why they should. Continue reading →

Post-2012 CPI Scores Can’t Be Compared Across Time, Either

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In post last week, I emphasized what lots of others have already tried (without much apparent success) to point out: Prior to 2012, Transparency International’s Corruption Perception Index (CPI) scores are not comparable over time.  The fact that a country’s score from one year to the next goes up or down might reflect an actual change in perceived corruption, but might be due to a whole host of other factors (changing aggregation methodology, changing scope of country coverage, change in perceived corruption of other countries, etc.), such that simple year-to-year comparisons are unreliable.  In making this point, I was not criticizing TI itself, which has been quite clear that the pre-2012 CPI scores cannot be compared across years.

But what about 2012 and after?  In 2012, TI announced, with much fanfare, that starting with the 2012 CPI and henceforth, scores across years would be comparable, due to changes in methodology (described here).

Is this right?  If it were, it would be a huge benefit both to scholars and policy reformers who want to evaluate changes over time–and the impact of various interventions.  Alas, after reading through TI’s discussion of the revised methodology, I regret to say the answer is probably no.

Continue reading →

Who Guards the Guardians in the Anticorruption Battle? Compelling Prosecutors to Take Action

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Article 30(3) of UNCAC calls upon state parties to ensure that any legal discretion pertinent to the prosecution of corruption is exercised to “to maximize the effectiveness of law enforcement.” Yet there is evidence that prosecutors do not always exercise their discretion in anticorruption cases in a manner that conforms to this principle. Prosecutorial decisions to shelve or terminate a case might instead be influenced by economic considerations — as when a large financial institution is involved, or when prosecution risks losing a valuable foreign investor — and by political considerations — as when the case may influence foreign diplomatic relations or when the case involves senior officials or other parties close to the governing regime.

There is no shortage of such troubling cases in both developed and developing countries. One of the best-known is the BAE Systems/Al-Yamamah case, which involved credible allegations that the British multinational had paid substantial bribes to senior Saudi Arabian officials in connection to a major arms deal. The UK investigation into the bribery allegations was brought to an end on grounds of public interest. The British government, and some of its defenders, emphasized the need to combat terrorism through maintaining relationship with Saudi Arabia with all underlying intelligence cooperation. Nevertheless, cases of this kind impair progress against entrenched corruption. Even if such cases are relatively infrequent, their existence risks depriving both the UNCAC treaty and domestic anticorruption laws of their deterrent effect.

If public prosecutors sometimes fail in their responsibility as anticorruption “guardians” by shelving or dropping investigations, what can be done? Long term solutions might require broader systemic reform, but there are some actions that could be taken, under the rubric of the UNCAC, to pressure or compel prosecutors to fulfill their responsibilities: Continue reading →

More on the Tension between Analysis and Advocacy for Anticorruption Academics

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A couple weeks back I posted some brief reflections that  alluded to the possibility of the tension,  between academics and advocates. I asserted this tension was something I’d observed, but I didn’t give any specific examples. Partly because of that weakness in the original post, I thought I’d follow up on this topic, using a concrete example of the tension I had in mind.

That example is drawn from a debate I’ve engaged in elsewhere on this blog with Maud Perdriel-Vaissiere, an advisor to the UNCAC Coalition. In brief, the substantive issue that she and I (and others) have been arguing about is the extent to which the UN Convention Against Corruption (UNCAC) obligates law enforcement agencies that recover judgments or settlements against bribe-paying firms to share those proceeds with the governments of the countries where the bribes were paid. I won’t go into all the details here. (For those who are interested, some of my earlier posts on the topic can be found here and here, and other contributors to this blog have discussed related issues here, here, here, and here.) In my most recent post on the subject, I specifically criticized Ms. Perdriel-Vaissiere’s discussion of the issue in a post she published on the UNCAC Coalition’s blog. Among other criticisms, I accused Ms. Perdriel-Vaissiere of failing to make basic distinctions between different types of legal recovery, of failing to acknowledge their different treatment under UNCAC, and of citing misleading statistics that conflated these different forms of recovery. I described the legal analysis in the post as “sloppy” and concluded with some harsh words: “The anticorruption community can and should do better.”

Ms. Perdriel-Vaissiere submitted a lengthy, detailed, and thoughtful rebuttal, which you can read in the comments section for the original post. Much of her response focuses on substantive matters where she and I respectfully disagree, and I leave it to interested readers to make their own determinations on those issues. But part of her reply caught my attention because it so nicely illustrates, in a much more concrete form, the “analyst vs. advocate tension” I alluded to generally in my post on the role of academics. Here’s what Ms. Perdriel-Vaissiere has to say in my response to my criticism that she cites misleading statistics that don’t take into account the differences between distinct forms of recovery: Continue reading →

Civil Society Combats Corruption: A Review of Shaazka Beyerle’s Curtailing Corruption: People Power for Accountability & Justice

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The now worldwide anticorruption movement remains a creature of its origins:  civil society.  It was Transparency International, a nongovernmental organization, that first gave voice to citizen demands for honest government,  and it is thousands of national and local groups that have put their own “boots on the ground” to demand public officials do something.  Now comes Shaazka Beyerle, Visiting Scholar at Johns Hopkins Center for Transatlantic Relations, to recount in fascinating and colorful detail some of the recent victories these warriors for an accountable and just government have achieved. Continue reading →

Pre-2012 CPI Scores CANNOT Be Compared Across Time–So Please Stop Doing It!

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OK, I know (as Rick pointed out in a recent post) that a lot — maybe too much — of the content on this blog has focused on measurement issues, so I apologize for yet another post on that topic, but this has really been bugging me:

Transparency International has been publishing its well-known and widely-used Corruption Perceptions Index (CPI) since 1995.  The index has its pros and cons, several of which have been discussed on this blog (see here, here, here, here, and here).  But putting other debates about the CPI’s validity and utility to the side, one thing should be perfectly clear: At least prior to 2012 (when TI changed its method and scoring system for the CPI), a country’s CPI scores CANNOT be compared across years.  The fact that Country X scores, say, a 4.4 in 2002, and scores a 4.9 in 2005, does NOT mean that (perceived) corruption has declined in country X.  Maybe it did, but it might have stayed the same, or gotten worse.  At most, the pre-2012 CPI provides information about country’s ranking relative to other countries, within a single year, with respect to corruption perceptions.

TI itself could not be more explicit about this, stating bluntly “CPI scores before 2012 are not comparable over time.”  Yet I keep coming across sources — news articles, presentations by leading international organizations, academic papers — that use year-to-year CPI comparisons to make claims about how corruption in a particular country or region is improving or worsening, or about whether a particular policy intervention is working or not.  YOU CAN’T DO THIS!  PLEASE STOP!!

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