Category Archives: Commentary

Commentary on the FACTI Panel’s Report and Recommendations (Part 1)

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This past February, the United Nation’s cumbersomely-named “High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda”—which, thankfully, everyone simply refers to as the FACTI Panel—released its report on Financial Integrity for Sustainable Development. The report (which was accompanied by a briefer executive summary and an interactive webpage) laid out a series of recommendation for dealing with the problem of illicit international financial flows. Though the report states that it contains 14 recommendations, most of these have multiple subparts, which are really distinct proposals, so by my count the report actually lays out a total of 35 recommendations.

I had the opportunity to interview one of the FACTI panelists, Thomas Stelzer—currently the Dean of the International Anti-Corruption Academy—for the KickBack podcast, in an episode that aired last week. Our conversation touched on several of the report’s recommendations. But this seems like a sufficiently important topic, and the FACTI Panel report like a sufficiently important contribution to the debates over that topic, that it made sense to follow up with a more extensive analysis of and engagement with the FACTI Panel’s recommendations.

Of the 35 distinct recommendations in the report, eight of them (Recommendations 2, 3B, 4A, 4B, 4C, 8A, 11A, and 14B) all deal with tax matters (such as tax fairness, anti-evasion measures, information sharing among tax authorities, etc.). While this is an important topic, it is both less directly related to anticorruption and well outside my areas of expertise. So, I won’t address these recommendations. That leaves 27 recommendations. That’s too much for one post, so I’ll talk about 13 recommendations in this post and the other 14 in my next post.

I should say at the outset that, while some of my comments below are critical, overall I am hugely grateful to the members of the FACTI Panel for their important work on this topic. The Panel’s report should, and I hope will, prompt further discussion and careful consideration both of the general problem and the Panel’s specific recommendation. Part of that process is critical engagement, which includes a willingness to raise concerns and objections, and to probe at weak or underdeveloped parts of the arguments. I emphasize this because I don’t want my criticisms below to be mistaken for an attack on the Panel or its report. Rather, I intend those criticisms in a constructive spirit, and I hope they will be so interpreted.


With that important clarification out of the way, let’s dig in, taking each recommendation in sequence.

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To Fix the United States’ Corrupt Border Agency, Defeat Its Union

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Immigration reform is likely to be a high priority for the Biden Administration, and while most of the attention will focus on substantive reforms and enforcement strategy, the agenda should also include rooting out corruption in U.S. Customs and Border Protection (CBP), the agency charged with protecting the United States’ land borders. CBP is the nation’s largest federal law enforcement agency. It is also among its most corrupt. Border Patrol agents and CBP officers are regularly arrested—at a much higher rate than other federal law enforcement personnel—for a variety of corrupt activities, including accepting bribes, smuggling drugs, collaborating with organized crime groups, and selling government secrets. (In one case, a Border Patrol agent even gave a cartel member a literal key to a border gate.) All told, U.S. border guards accepted an estimated $15 million in bribes over the 2006–2016 period. Senior CBP officials have estimated that as many as 20% of CBP employees may be corrupt, and almost half of CBP personnel say that they’ve witnessed four or more acts of misconduct by their colleagues in the preceding three years.

The story of CBP’s corruption has been well told, including in voluminous investigative reporting, an advisory panel report, and congressional hearings. Yet little has changed. And this is not because nobody has figured out what policy reforms could make a difference. Indeed, experts who have studied the problem have laid out, clearly and consistently, a package of recommendations that would make a substantial difference. That package includes two main elements. First, CPB must devote more resources to monitoring and investigating CBP personnel. For example, the agency should hire substantially more internal affairs investigators; subject exiting personnel to regular reinvestigations (including periodic polygraph examinations); and equip all officers and agents with body cameras and mandate their consistent use. Second, leadership must reform CBP’s culture, which too often tolerates bad actors and punishes whistleblowers, and must provide better training in how to respond to misconduct.

The failure to address the CBP’s corruption problem, then, has not been due to a lack of viable, feasible reforms. The main problem is political—perhaps most importantly, the entrenched opposition of the National Border Patrol Council (NBPC), the powerful union that represents Border Patrol agents. The NBPC has systematically blocked efforts to crack down on corruption. Indeed, according to James Tomsheck, who led CBP’s internal affairs unit from 2006­–2014, NBPC leadership opposed each and every one of his integrity proposals over his eight year tenure. (For example, the union opposed CBP’s initiative to proactively identify corrupt officers and agents through polygraphing.) If the Biden Administration is serious about rooting out CBP corruption, it will need to take on the NBPC.

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Rethinking the Hatch Act in a Post-Trump World

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In the United States, the Hatch Act has long served as bulwark against the corrosive intersection of partisan politics and government power. Signed into law in 1939, the Hatch Act was designed to combat the corruption associated with the so-called “spoils system,” in which politicians dole out valuable government jobs to their supporters, and those supporters are in return expected to use their government positions to benefit their political patrons. Civil service laws that create a “merit system” attack the spoils system from one direction, by making politically-motivated hiring and firing more difficult. Laws like the Hatch Act complement these efforts by prohibiting government employees from engaging in partisan political activities. More specifically, the Hatch Act prohibits any federal officer or employee (other than the President or Vice President) from engaging in political activity while acting under his or her “official authority or influence.” (This prohibition, as interpreted, covers any sort of partisan political activity while on the job, including displaying political paraphernalia, distributing campaign materials, and soliciting campaign contributions.) Penalties for violating the Hatch Act can include fines, demotion, suspension, removal from office, and temporary debarment from future federal service.

Since its enactment, compliance with the Hatch Act has generally been quite good. But that changed in January 2017, when President Trump took office. Throughout the Trump years, rampant violations of the Hatch Act plagued the federal government. High-level Trump Administration officials like Ivanka Trump, Jared Kushner, Mike Pompeo, Kellyanne Conway, and Stephen Miller, among many others, engaged in likely Hatch Act violations, with no significant consequences. This exposed an uncomfortable truth: At least for high-level political appointees, the Hatch Act’s enforcement mechanisms are too week, and the penalties too negligible, to deter officials uninterested in complying with the law. Indeed, past compliance with the Act was likely more the product of government norms than fear of punishment.

Just to be clear, the situation is likely quite different for career civil servants who serve in government regardless of which political party holds the White House. With respect to these individuals, who comprise the overwhelming majority of the government, the Hatch Act’s prohibitions are strictly enforced, and the penalties are stiff. But for senior political appointees, the Trump Administration exposed glaring weaknesses in the Hatch Act’s efficacy, when the Administration has little interest in adhering to conventional norms of ethics and integrity. Two types of reform are needed:

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TI France Demands Dismissal of Gabon Government Claim to be Corruption Victim

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TI France is moving to block an audacious, underhanded move by the Gabonese government to frustrate the confiscation of hundreds of millions in assets stolen from its citizens.  The assets are likely to be confiscated as part of the proceedings known as Bien Mal Acquis (wrongfully acquired assets), where French prosecutors are investigating the ruling families of Gabon, Equatorial Guinea and the Republic of the Congo for buying hundreds of millions of euros of French real estate and other properties with corrupt monies. In 2017, in the first case to go to trial, €150 million in French assets were confiscated from Equatorial Guineans First Vice President Teodorin Obiang (here).

Apparently anticipating a similar result, the Gabonese government recently joined the proceedings as a partie civile or civil party.  Under French law, if a court orders the confiscation of the Gabonese ruling family’s assets, the Gabonese government would then have a claim to some if not all of the assets under the theory it is entitled to recover damages suffered by the ruling family’s corruption. A just and reasonable outcome were a democratically elected government committed to its citizens’ welfare in power.

Tragically, for the Gabonese people this is not the case.  The same family responsible for stealing the nation’s wealth, the Bongos, remains in power.  TI France has now moved to have the government’s claim to be a civil party dismissed. This should be an easy decision for the presiding magistrate given how well the Bongo family’s corruption has been documented. 

The continued active participation of civil society in the landmark Bien Mal Acquis case shows how critical it is that anticorruption NGOs to represent those like the citizens of Gabon, Equatorial Guinea, and the Republic of the Congo where their governments make it impossible for corruption victims to bring cases on their own.  The TI Press Release on its move to strike the Gabonese government as a civil party is here. The origins of Bien Mal Acquis and its lessons are discussed here.

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Can Slovakia’s New Anticorruption Movement Avoid Common Pitfalls?

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In late February 2018, news that Slovakian anticorruption journalist Jan Kuciak was shot to death at home—the first murder of a journalist in Slovakia’s modern history—shocked the country and world. Slovakians demanded that the government, controlled by the corruption-plagued Direction-Social Democracy (SMER-SD) party, investigate the brazen attack and hold the perpetrators accountable. Tensions escalated in the days following Kuciak’s murder after his last unpublished story surfaced, exposing connections between advisors to SMER-SD Prime Minister Robert Fico and a prominent Italian organized crime syndicate. Fico resigned shortly thereafter, a development which proved to be the beginning of the end of SMER-SD’s twelve-year reign. By the February 2020 general election, voters decisively ousted SMER-SD in favor of the emerging anticorruption-focused Ordinary People and Independent Personalities Party (OLaNO).

Much of OLaNO’s appeal stems from party leader and current prime minister Igor Matovic, a self-made media mogul. His signature communication method was posting videos exposing graft to social media (similar to Russian anticorruption hero Alexei Navalny, whom this blog recently discussed here). In one of Matovic’s most widely viewed videos, he filmed himself in Cannes outside the luxury home of a former SMER-SD politician holding signs saying “Property of the Slovak Republic” and alleging that the home was illegally bought with taxpayer money. Matovic also traveled to Cyprus and posted a video of mailboxes belonging to shell corporations connected to Penta, a multi-million-euro investment group; the video claimed that Penta had used the companies to evade 400 million euros in taxes. Each of Matovic’s videos garnered several hundred thousand views in a country of less than 5.5 million, which helps explain why the February 2020 election boasted Slovakia’s highest voter turnout in 20 years.

Now, just one year into its mandate, OLaNO and its coalition are hard at work rooting out corruption. The government arrested and prosecuted dozens of current and former public officials involved in graft. Those targeted include high-level figures, such as the former Finance Minister, the head of the State Material Reserves Administration, the Director of the Agricultural Paying Agency, and more than a dozen judges, including a member of the Supreme Court and the former Deputy Minister of Justice. OLaNO is also pursuing a number of legislative efforts, including aggressive judicial reform.

Can Matovic and OLaNO finally cleanse Slovakia’s reputation as the corruption “black hole of Europe”? Maybe. But while the story of an outsider stepping forward in the wake of a national scandal and securing electoral victory with an anticorruption political agenda may be a first in Slovakia’s modern history, it is not an unknown tale on the world stage—and (spoiler alert!) the story often doesn’t have a happy ending. To be sure, difficult political dynamics and entrenched domestic corruption can hamper even the most earnest anticorruption efforts. Nevertheless, examples from other countries provide some cautionary tales of how populist leaders elected on anticorruption platforms can sometimes lose their way, and offer some lessons that Matovic, OLaNO, and their supporters should take to heart going forward. Three lessons in particular stand out:

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The Perils of Over-Criminalizing Sports Corruption

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Although the fight against corruption has traditionally focused on corruption in government, the anticorruption community has started to pay more attention to corruption in other spheres. One particularly prominent concern is corruption in sports (see here, here, and here). The topic of sports-related corruption includes not only corruption in the major sports associations (think FIFA and the International Olympic Committee), but also the corrupt manipulation of individual sporting events in order to win bets (whether legal or illegal). Such corrupt manipulation includes match-fixing (where corrupt actors fraudulently influence the outcome of a game); spot-fixing (where wrongdoers seek to influence events within the game that do not necessarily have a significant effect on the final outcome, such as the number of minutes an athlete plays or timing the first throw-in or corner in a soccer game); and point-shaving (where perpetrators seek to hold down the margin of victory in order to avoid covering a published point spread).

Different jurisdictions approach this sort of sports corruption differently. Many countries in Europe have enacted blanket laws criminalizing match-fixing in order to uphold the integrity of sports. The United States, by contrast, takes a narrower approach: The relevant criminal laws targeting sports corruption in the U.S.—both the Federal Sports Bribery Act (the “Act”) and comparable laws at the state level—focus solely on bribery. Furthermore, the Act has historically been used to prosecute individuals involved in paying bribes or inducing others to collect bribes, but not the people (usually athletes, coaches, or officials) who receive the bribes. Although a great deal of corruption in sports involves the payment of bribes, and would therefore be covered by these laws, some types of sports corruption are unilateral: An athlete or sports official may place bets on sporting events and subsequently undertake behavior to win those bets. For this reason, some scholars have argued that the U.S. should close this loophole by criminalizing such unilateral conduct as well.

I disagree. To be sure, unilateral sports corruption is unethical, and criminalizing it would help to prevent athletes, referees, and coaches from engaging in corrupt acts that jeopardize the integrity of sports. But the benefits of criminalizing this form of misconduct are minimal and are greatly outweighed by the corresponding costs.

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Sunshine or Sunset? The Latest Threat to Freedom of Information in Mexico

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In a country beset by extreme and seemingly intractable corruption, Mexico’s National Institute for Access to Information (INAI)—which runs Mexico’s freedom of information system—has stood out as an unusually effective mechanism for promoting transparency, accountability, and integrity. The INAI’s effectiveness stems from its binding legal authority and independence, as provided by constitutional provisions passed in 2013. The Institute can and has compelled other government agencies to improve their information disclosure policies, and, perhaps most significantly, the INAI can override other government agencies’ denial of information access requests. The INAI has substantial leverage to ensure greater government compliance by way of meaningful fines and effective injunctions for noncompliance. The INAI also moves lightning fast; the INAI regularly satisfies its statutory obligations to respond to requests within twenty business days and to deliver documents within thirty. The INAI does not charge search fees, and all uncovered information is available to the wider public. Citizens can challenge decisions to withhold information, and they routinely prevail.

The INAI’s broad freedom of information mandate makes the agency a powerful actor in exposing corruption (see, for example, here, here, and here). Perhaps most notably, the Institute enabled discovery of former President Pena Nieto’s secret mansion (“the White House Scandal”), the diversion of over $400 million allotted to public services, and embezzlement in public-private ventures in Mexico’s vast energy sector. More broadly, despite all the well-known deficiencies of Mexico’s anticorruption institutions, the INAI has been globally lauded for its role in government transparency.

Given this, why is Mexico’s President Andrés Manuel López Obrador (commonly referred to by his initials “AMLO”), who ran and won on an anticorruption platform, so keen on eradicating the agency? In a press conference earlier this year, AMLO proposed decommissioning all of Mexico’s independent agencies, singling out the INAI as an especially egregious example of bloated bureaucracy. His rationale boils down to three main arguments: (1) the INAI hasn’t ended corruption, (2) the INAI costs too much, and (3) the INAI’s functions can be provided by the Secretariat of Public Functions (SFP), a non-independent body that performs federal government audits and reports directly to the president. These arguments are unconvincing, to say the least.

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The Many Uses of Xi Jinping’s Anticorruption Campaign

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Since Chinese President Xi Jinping launched his anticorruption campaign in 2012, much of the foreign commentary has debated the extent to which the campaign is a genuine effort to root out corruption or a means for purging or undermining President Xi’s political opponents. This simple framing, however, obscures the other uses and objectives of the anticorruption campaign. Better understanding these motivations is important to understanding the dynamics of the campaign and the role that anticorruption plays in modern Chinese politics. Three political and policy objectives are particularly notable:

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Peace and Profiteers: Corruption in the Libyan Process

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This past February, delegates from the UN-led Libyan Political Dialogue Forum (LPDF) seemed to do what a slate of other diplomatic tracks had yet to achieve: give Libyans hope for peace. On February 5, under the auspices of the UN Mission to Libya (UNSMIL), the 74 Libyan delegates making up the LPDF elected businessman Abdulhamid Debeibah to lead a transitional Parliament as its Prime Minister, vesting him with the responsibility of ferrying Libya to free and fair elections this coming December. With all the main warring parties appearing to come to the table in good faith, it seemed UNSMIL had engineered a transformational breakthrough in a conflict that has torn Libya apart at the seams for the past decade. As the process unfolded, the international community watched with baited breath. A joint statement by the United States, United Kingdom, France, Germany, and Italy blessed the process, giving the LPDF its “full support.” The UN Security Council called the election an “important milestone.” The stage was set, at long last, for a successful consolidation of power into one transitional government.

The only problem? The vote electing Debeibah was rigged.

On March 2, a leaked UN report written by the Panel of Experts, an investigatory UN body, revealed that Debeibah had bribed several LPDF delegates to elect him Prime Minister. According to the report, two participants “offered bribes of between $150,000 to $200,000 to at least three LPDF participants if they committed to vote for Debeibah.” One delegate reportedly exploded in anger in the lobby of the Four Seasons hotel hosting the LPDF when he heard that some delegates received $500,000 for their bribes. Apparently, he only received $200,000.

Just hours after the news dropped, UNSMIL issued a strong response. It threw its full support behind Debeibah, distanced itself from the UN Panel of Experts, and urged the newly elected Parliament to confirm Debeibah’s election at its first scheduled session on March 8. And while outside observers can only speculate as to UNSMIL’s motives, this see-no-evil response to the Panel’s bombshell revelations may well reflect a frantic attempt to salvage a peace process the entire international community has rallied behind. Indeed, proponents of UNSMIL’s position have argued that the long-term stability of moving ahead with Debeibah at the helm and keeping December’s election schedule on track is worth any short-term scandal, as further disruption of the process could lead to its unraveling. This position—which has been endorsed by experts and fellows from the Brookings Institution, the European Council on Foreign Relations, and others—may seem like hard-headed realism. But in fact, UNSMIL’s refusal to hold Debeibah and his co-conspirators accountable through an open and transparent process is a mistake. UNSMIL has chosen, as one Libyan lawyer and LPDF delegate put it, to “priorit[ize] expediency above all else and at the expense of due process,” and by doing so, UNSMIL risks undermining both the LPDF’s legitimacy and Libya’s long-term peace prospects.

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Actions for Damages Caused by Corruption: American Law

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American law allows corruption victims to recover damages under a variety of legal theories, and its class action procedures are well suited for recovery in certain cases.  This post discusses who the law deems a victim and what damages they are entitled to recover.  A second post will suggest where countries developing their own corruption victim law might follow American practice, and where American practice should be avoided at all costs.

In the United States, the party that most often recovers damages for corruption is a company whose employee accepted a bribe. The bribe will have been paid in return for awarding the bribe-payer a contract or for approving poor performance or overpayment on a contract the payer already holds with the employer. Most cases have arisen from one firm bribing an employee of another, but the same law applies when the victim is a government agency whose employee was bribed. U.S. agencies (here), cities (here and here) and counties (here), local police forces (here) and the United Nations (here) have all collected damages in these circumstances. So have foreign governments when the bribe was paid in violation of the Foreign Corrupt Practices Act (chapter 10 here). 

The basis of the employer’s damages is in taking a bribe the employee breached the duty of loyalty owed the employer. The duty of loyalty is also grounds for recovery in conflict of interest cases.  The most well-known public conflict of interest case is from the early 20th century. In United States v. Carter, Army Captain Oberlin Carter had awarded dredging contracts to a company in which he had a secret interest. The court ruled that not only was the Army entitled to Carter’s share of the company’s profits but to any money he had earned from investing those profits.

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