Category Archives: Commentary

An Anticorruption Success Story: India’s Aam Aadmi Party Has Made Delhi Politics Much Cleaner

Posted on by
9

In 2011, India witnessed the largest anticorruption uprising in its history, as hundreds of thousands of people mobilized to protest against entrenched corruption and to push for the passage of national anticorruption legislation that had been stuck in parliament for decades. The movement failed to achieve that objective, but out of its ashes was born a new political party, the Aam Aadmi Party (AAP). The AAP, founded in 2013, made anticorruption its main focus, choosing as its symbol a broom to represent its goal of cleaning up Indian government. The AAP achieved its first major victory in 2015, when it won a landslide victory in the state elections in Delhi, India’s capital city. Many inside and outside of India naturally wondered: Would the AAP achieve its goals? Could it effectively govern a city of 19 million people, and succeed in curtailing entrenched corruption? After all, the challenges are enormous, and the international track record of anticorruption parties is rather mixed.

The AAP’s journey wasn’t smooth, and its first few months in office were marked by significant infighting and a general perception of dysfunction. But the AAP managed to turn things around, and in the February 2020 elections, the AAP won handily, gaining a decisive majority for the next five years. The AAP’s success is partly due to its popular policies on things like increasing spending on education and reducing the cost of electricity and water. But the AAP also succeeded in the polls because it followed through on its anticorruption agenda. Although it’s always hard to gauge the success of anticorruption efforts, there are two major pieces of evidence that indicate that the AAP really has taken major steps to clean up politics: 

Continue reading →

The Brazilian Courts’ Indefensible Double Standard: The Disparate Treatment of Harmless Procedural Errors in Corruption and Non-Corruption Cases

Posted on by
4

Before Brazil’s so-called Lava Jato (“Car Wash”) Operation, almost every attempt to prosecute high-level corruption in Brazil failed. Many cases were never investigated or prosecuted, but even in those cases where prosecutors started investigations, identified crimes, and brought charges, appeals courts ended up nullifying the proceedings, often before trial, on technical grounds for failure to comply with procedural rules (see, for example, here, here, here, and here). The result was a culture of impunity, in which grand corruption thrived. The Lava Jato Operation has been hailed as a historic breakthrough not only because of the breadth of the corruption it uncovered, but also because the convictions secured by prosecutors had, by and large, been affirmed on appeal. Unfortunately, there are troubling signs that the Brazilian judiciary is reverting to its old ways. Last October, for example, the Brazilian Supreme Court issued a procedural ruling  concerning the sequence of closing arguments that the Court held required the nullification of two Lava Jato convictions (so far), and may end up doing more widespread damage. The larger issue here, though, is the double-standard that Brazilian appellate courts seem to have embraced: adopting an (excessively) stringent and unforgiving view of even minor technical procedural noncompliance in corruption cases involving elite defendants, while at the same time relying (properly) on “harmless error” doctrines to excuse similar sorts of procedural noncompliance in cases involving other sorts of crimes, such as drug trafficking. Continue reading →

Recovering Damages for Mozambican Victims of the Hidden Debt Scandal: Possible Suits in the United Kingdom

Posted on by
Reply

A recent post explained that Mozambicans harmed by the corruption behind the “hidden debt” scandal may well be able to sue the perpetrators for damages in the courts of many nations.  Mozambique, where the harm was suffered, and most probably France, Lebanon, Russia, Switzerland, the United Arab Emirates, and the United Kingdom, countries where one or more of the alleged perpetrators is located or does business.  The legal basis would be article 35 of the United Nations Convention Against Corruption.  It requires convention parties to open their courts to actions by corruption victims against “those responsible” for the corruption “in order to obtain compensation.”

The U.N. Office of Drugs and Crimes reports that all 187 parties accept the principle of compensation for corruption.  Suits for corruption damages are a relatively recent development, however, and in its latest review of the convention’s implementation, UNODC explains that establishing causation and proving damages remain to be elaborated through application of parties’ domestic law principles governing harm caused by intentional acts.  At the same time, it noted that in corruption damage cases article 35 mandates that these principles be interpreted broadly.  There need be no direct interaction between the perpetrators of corruption and the victim; nor is recovery limited to cases where the perpetrators foresaw the injury the victim would suffer.

In a just released paper, London barrister James Mather shows how English law would apply to claims Mozambicans brought for hidden debt damages in the United Kingdom. He opines that recovery could be had on the basis of an unlawful means conspiracy and perhaps too on the tort of bribery and dishonest assistance.  English law, he writes, incorporates the liberal principles of causation of damages enshrined in article 35. “The approach to the award of damages for conspiracy in particular is quite liberal in English law and extends to losses which cannot be strictly proved.”  English law also offers Mozambican claimants a procedural advantage.  Rather than each person having to file a separate suit, a group action could be filed with a single claimant suing on behalf of all those who suffered a similar injury.

Mather, a distinguished member of Serle Court in London, cautions that while based on what has been reported it would appear Mozambicans injured by the hidden debt scandal could recover damages in the United Kingdom, much factual research is required to be sure. His paper is an important step forward in seeing that those who suffered enormous harm thanks to the corruption behind the hidden debt scandal are made whole by the perpetrators.  Click on Mather paper to download a copy of his first-rate analysis.

Are Financial Declaration Systems Creating Opportunities for Corrupt Extortion?

Posted on by
2

One of the most popular reform measures for combating public corruption is the establishment or strengthening of requirements that public officials regularly file declarations of assets and income sources. Mandatory financial disclosure rules are not exclusively about fighting corruption, of course, but anticorruption is certainly one of their principal justifications. Requiring public officials to formally submit and update income and asset declarations, and attaching meaningful penalties for false or misleading declarations, is thought to help suppress corruption in at least three ways:

  • First, identifying assets and income sources makes it easier to identify, and hopefully to avoid, conflicts of interest.
  • Second, public officials who report suspicious asset growth during their time in office might attract unwanted scrutiny from law enforcement investigators—and also, if the declarations are public, from journalists and activists. Submitting false reports or finding clever ways to hide assets are of course possible, but are costly and risky.
  • Third, precisely because corrupt public officials will often lie on their financial declarations in order to avoid scrutiny, these mandatory disclosure laws can sometimes provide the hook to hold corrupt officials legally or politically accountable even when it is impossible to prove the underlying corruption. We might not be able to nail the corrupt official for bribe-taking or embezzlement, but if we can show that he owns substantial undeclared assets, we can still nail him for lying on his financial declarations.

There are important ongoing debates about the appropriate design of financial disclosure systems, including questions about whether the disclosures should be public or kept confidential, who should be required to submit disclosures (and how often), what sort of information should be required (and at what level of detail), whether and how declarations should be independently verified, the appropriate institution to manage the system, and the appropriate penalties for noncompliance (see also here). And the efficacy of mandatory financial disclosures in reducing corruption is still unsettled (see here, here, here, here, and here). Nevertheless, the basic anticorruption case for some form of mandatory financial disclosure system seems strong. Both domestic anticorruption activists and the international community therefore regularly push for the creation of such systems where they do not already exist, as well as for the strengthening and expansion of existing systems.

While acknowledging the uncertainties and complexities of the issue, I find the basic case for some form of (strong) mandatory financial declaration system persuasive. That said, I’ve recently had some interesting conversations with a couple of experts who have highlighted a potential problem that I confess I hadn’t previously thought about or seen discussed in the published literature: In countries where corruption is widespread and institutional checks are weak, the government agents who administer the financial disclosure system could abuse their power to extort bribes from the public officials who are subject to the declaration requirements. Continue reading →

Ukraine’s Bold Experiment: The Role of Foreign Experts in Selecting Judges for the New Anticorruption Court

Posted on by
7

The fight against corruption has been a central focus for Ukraine since the 2014 Maidan Revolution. In the immediate aftermath of Maidan, the country created four new institutions, the National Anti-Corruption Bureau of Ukraine (NABU) (an investigative body), the Special Anti-Corruption Prosecutor’s Office (SAPO) (with prosecutorial powers), the National Agency for Prevention of Corruption (NAPC) (responsible for administering the e-asset declaration system), and the Asset Recovery and Management Agency (ARMA) (tasked with recovering stolen assets). Yet the problem of impunity for grand corruption has persisted, and many believe that the weak link in the chain has been the Ukrainian judiciary. In addition to familiar problems of delay and inefficiency, Ukrainian judges are widely viewed as susceptible to political influence, and even corrupt themselves. To address this problem, in 2018—thanks to the combined lobbying efforts of Ukraine’s vibrant civil society and pressure from international donors, primarily the International Monetary Fund (IMF)—Ukraine enacted a new law creating a specialized anticorruption court known as the High Anti-Corruption Court (HACC), which began operations this past September.

The most innovative and controversial feature of this new court is the inclusion of foreign experts in the judicial selection process. While many countries have created specialized anticorruption courts, and many of these have special judicial selection systems that differ from the procedures for appointing ordinary judges, the participation of foreign experts in the HACC judicial selection process was unprecedented. Yet both domestic civil society groups and outside actors like the IMF and the Venice Commission (the Council of Europe’s advisory body for legal and constitutional matters) came to see foreign participation in the selection of HACC judges as crucial, particularly in light of the controversial selection process for judges to Ukraine’s Supreme Court in 2017. In the selection to the Supreme Court, multiple candidates were approved by Ukraine’s High Council of Justice (HCJ) despite the fact that those candidates were found to be ethically tainted by the Public Integrity Council (PIC), a civil society watchdog that assists the High Qualification Commission of Judges (HQCJ) in assessing the integrity of judicial candidates. Thus, when lobbying for the HACC, civil society and some members of parliament demanded that the law guarantee the presence of foreign experts with the power to veto judicial candidates, in order to ensure that no judges were appointed to the HACC if there was reasonable doubt about their integrity.

As a short-term stopgap, the involvement of foreign experts in the HACC judge selection is promising and may even serve as a useful model for other institutional reforms within Ukraine, and for other countries. But reliance on foreign experts to address concerns about selecting judges (or other officials) of sufficient integrity is probably not a long-term solution. Continue reading →

High Costs: Corruption Scandals in America’s Legal Marijuana Industry

Posted on by
11

The movement to legalize marijuana in the United States has been gaining momentum. Thirty-three states and the District of Columbia have currently legalized marijuana to some degree, and of those, eleven states and D.C. have legalized recreational use of marijuana.  (Selling, possessing, consuming marijuana remains illegal under federal law, but the federal laws against marijuana are rarely enforced, which creates a rather odd situation in the states that have legalized marijuana: those who participate in the marijuana market are still technically engaged in illegal activity, even though that market operates out in the open.) In the absence of uniform federal regulation, those states that have legalized marijuana have adopted different regulatory approaches; most states issue a limited number of licenses to sell or supply marijuana, but have capped the number of licenses in order to limit the amount of marijuana on the market. This makes each license extremely valuable, given that the total value of the marijuana market is estimated to be somewhere in the neighborhood of $52 billion. Additionally, in most states the license evaluation criteria, and the evaluation process, are extremely opaque, and local government officials frequently have substantial discretion regarding who receives these licenses.

Given this combination of factors—state and local officials with the power to issue a small number of extremely valuable licenses through an opaque process—it should come as no surprise that the legal marijuana market has become a hotbed for corruption. Consider just a few examples: Continue reading →

Will This Whistleblower Cost Equatorial Guinea its IMF Loan?

Posted on by
3

Juan Carlos Angue Ondo, pictured below, is the latest individual to reveal details of the grand corruption that plagues Equatorial Guinea.  In recent interviews (here in English and here in Spanish), he describes how the country’s rulers use the judicial system to perpetrate corrupt schemes and maintain their grip on power. The revelations confirm what human rights (here and here) and anticorruption groups (here and here) have said for years: that ideas of judicial independence, due process, and the rule of law are strangers to Equatorial Guinea. 

Angue’s whistleblowing comes at particularly fraught time – both for the nation and for the International Monetary Fund. As blog readers know (here and here), last December the government secured an IMF loan to rescue the economy from recession.  In return, it pledged to take concrete, measurable steps to strengthen the rule of law and combat corruption.  An obvious first step would be to take what Angue claims seriously.  To investigate the allegations, and where warranted prosecute wrongdoers and make needed reforms to laws and judicial institutions. But will Equatorial Guinea’s government do so?

And what will the IMF do if it does not? Halt loan disbursements?  Or sweep the matter under the rug?

The allegations cannot be lightly dismissed. Angue likely knows more about judicial corruption, the absence of the rule of law, and the lack of judicial independence than anyone in Equatorial Guinea. Continue reading →

The Independence of U.S. Law Enforcement is Under Attack. Here’s What Congress Can Do About It.

Posted on by
7

The politicization of the institutions of justice, particularly those associated with criminal law enforcement, is one of the greatest threats to the rule of law and the integrity of government. Corrupt leaders in democracies and autocracies alike seek to undermine any check on their power, thus ensuring impunity for themselves and their allies, and may also try to weaponize criminal investigations to harass and discredit political opponents. For many years, most Americans viewed this sort of threat to the integrity of the institutions of justice as something that only happened abroad, or in the distant past. Not so anymore. Under the Trump Administration, the corruption and politicization of law enforcement institutions is a significant threat to American democracy.

That President Trump lacks respect for the independence and integrity of law enforcement has been evident for some time, at least since Trump fired FBI Director James Comey. (Trump dismissed Comey in part to the FBI’s investigation into potential collusion between Trump’s campaign associates and Russia during the 2016 election, and in part because Comey wouldn’t pledge his personal loyalty to the president.) In the last month, the situation appears to be getting even worse. As has been widely reported in the media, President Trump publicly criticized the Department of Justice (DOJ) for seeking a high sentence in the case of Trump associate Roger Stone; Attorney General Bill Barr claimed that President Trump didn’t issue any specific instructions regarding the case (and complained about the President’s tweeting), but Barr nonetheless recommended a much lower sentence that the DOJ’s own prosecutors had originally requested. Barr recently made the highly unusual decision to install an outside prosecutor to oversee the case against President Trump’s former National Security Advisor Michael Flynn. In another troubling move that didn’t get as much press attention, in early February Barr issued a memo saying that any FBI investigations into 2020 candidates or their campaigns would require the Attorney General’s approval.

Trump has asserted that he had the legal right, as President, to intervene in criminal cases. This is a contested claim, to say the least. Some argue that, under the U.S. Constitution, the President has ultimate control not only over general DOJ policy, but over decision-making in individual criminal prosecutions. However, others assert that this is not so, and that the Constitution actually imposes certain limits the President’s control over individual prosecutions—most importantly, that the President cannot seek to affect a criminal case out of corrupt or self-interested motivations.

Putting the legal debate to one side for now, and assuming that Congress—if not now, then at some point in the future—would like to establish new safeguards to insulate the DOJ and FBI from the corrupting influence of an unscrupulous president, what might Congress do? I suggest three steps that Congress might take:

Continue reading →

Senator Warren’s Plan to Establish an Independent Task Force to Investigate Trump is a Bad, Bad Idea

Posted on by
8

Last month, Senator and Democratic presidential candidate Elizabeth Warren made a bold anticorruption commitment. She said that, if elected, she would direct the US Department of Justice to establish a special taskforce to investigate the Trump administration for violations of US anticorruption laws—including federal bribery laws, insider trading laws, and public integrity laws. She has has called on every other Democratic presidential candidate to do make the same commitment. Given the egregious corruption of the Trump administration, Senator Warren argues, a special taskforce of this kind is necessary if we are to “move forward to restore public confidence in government and deter future wrongdoing[.]”

Senator Warren—perhaps more than any other Democratic candidate—has put the fight against corruption (both narrowly and broadly defined) at the center of her campaign, and she has generated a range of proposals to combat corruption and strengthen the integrity of US political institutions. She has many good ideas. But this is not one of them. Regardless of whether members of the Trump Administration—including the President, his family members, and members of his cabinet—have engaged in illegal corrupt acts, forming a special DOJ taskforce along the lines proposed by Senator Warren would be a bad idea—bad for the Democratic party, bad for the DOJ, and, most importantly, bad for the United States.

Continue reading →

Do Stronger Campaign Finance Disclosure Rules Reduce Corruption? A Critical Assessment of Transparency International’s CPI Report

Posted on by
3

Transparency International (TI) released its latest Corruption Perceptions Index (CPI) last month. A couple weeks back, in what has unfortunately become a necessary annual tradition, I posted a warning that one should not attach significance to short-term changes in any individual country’s CPI score. Today, I want to turn to another matter. In recent years, whenever TI releases a new edition of the CPI, the organization plays up certain themes or claims that, according to TI, the CPI reveals about corruption’s causes or impact. This year, one of the main themes in the report is the connection between corruption and campaign finance regulation. As this year’s lead TI press release on the CPI declares, “Analysis [of the data] shows that countries that perform well on the CPI also have stronger enforcement of campaign finance regulations.… Countries where campaign finance regulations are comprehensive and systematically enforced have an average score of 70 on the [100-point] CPI, whereas countries where such regulations either don’t exist or are so poorly enforced score an average of just 34 or 35 respectively.” (On the CPI, higher scores indicate lower perceived corruption.)

How did TI arrive at this conclusion? The report accompanying the CPI, and the longer research brief on this topic, give a bit more explanation. TI used another index, from the Varieties of Democracy (V-Dem) project, on “Disclosure of Campaign Donations.” The V-Dem index rates countries’ disclosure requirements for campaign donations on a 0-4 ordinal scale. TI took this scale, collapsed the 0 and 1 categories into one (allegedly for “data visualization purposes,” though I’m not sure what this means), and then calculated the CPI score for the countries in each of the four categories. The results:

  • For those countries with a V-Dem disclosure score of 0/1 (no disclosure requirements or requirements that are partial and rarely enforced), the average CPI score was 34.
  • For countries with a V-Dem score of 2 (uncertain enforcement of disclosure rules) the average CPI was 35.
  • For countries with a V-Dem score of 3 (disclosure requirements exist and are enforced, but may not be fully comprehensive), the average CPI score was 55.
  • Countries with a V-Dem score of 4 (comprehensive and fully enforced disclosure requirements) had an average CPI score of 70

That looks like pretty strong evidence that strong campaign finance disclosure rules are associated with lower corruption, and that’s certainly the story TI wants to tell. As the report puts it, “Unregulated flows of big money in politics … make public policy vulnerable to undue influence.” The research brief similarly explains, “Shedding light on who donates and how much, can expose the influence of money in politics and deter corruption and other pay-to-play situations.”

The claim may ultimately be correct, but on closer inspection, the evidence TI adduces in support of that claim is deeply problematic. Continue reading →