Can Sri Lanka Clean Up Its Elections?

Schools bags, school books, seed and fertilizer, clothes, sewing machines, clocks, calendars, and mobile phones – these are just some of the items that were distributed to the public during the 2015 Sri Lankan Presidential election campaign as “election bribes”. Indeed, this election was plagued by widespread violations of election law and the blatant misuse of state resources, including the illegal display of cut-outs, distribution of money during political meetings, the use of vehicles belonging to state institutions for propaganda purposes, and the construction of illegal election offices. Moreover, overall spending on election activities by the two main candidates was colossal. Incumbent Mahinda Rajapaksa (the losing candidate) is reported to have spent over 2 billion Rupees (approximately US$13 million) of public funds on his advertising campaign alone, excluding the cost of production, while the winning candidate, Maithripala Sirisena, is reported to have had a budget of 676 million Rupees (approximately US$ 4.4 million) for electronic and print media.

In this context, reports that the Cabinet of Sri Lanka has unanimously approved a proposal to amend the country’s election laws in order to place more controls on campaign-related expenditures is good news. Such reform would address a gaping void in the existing legal framework: although Sri Lanka has laws prohibiting vote-buying and similar practices, there are currently no laws regulating campaign finance. The specifics of the approved Cabinet Memorandum are still not publicly available, and it is therefore not yet possible to offer a detailed evaluation of the proposed changes. Nonetheless, given what we already know about election campaigns in Sri Lanka—especially regarding the corruption risks associated with the lack of adequate regulation—it is possible to offer a few general observations and recommendations. Continue reading

Learning from Defeat: The Menendez Case

Last Friday, the Department of Justice asked for another chance to try U.S. Senator Robert Menendez on corruption charges, requesting that the court “set the case for retrial at the earliest possible date.”  The first trial resulted in a mistrial.  Ten of the 12 jurors held out for acquittal, saying prosecutors had produced no “smoking gun.”  Yet the prosecution did indeed have a smoking gun – irrefutable proof the Senator broke the law – which it did in fact show the jury.

Prosecutors can learn much about trying corruption cases from the failure to convict Menendez the first time.  Not, as one commentator claims, that America’s anticorruption laws are so flawed only the most flagrant violators need fear them.  The lessons have nothing to do with America’s anticorruption laws, which are hardly in bad shape. Nor its system of 12 citizens determining the facts in a criminal case.  Continue reading

The Dismissal of the CREW v. Trump Emoluments Lawsuit: Some Quick Reactions

As those who follow the debates swirling around President Trump’s extensive conflicts-of-interests are likely aware, last month a United States District Court dismissed, on jurisdictional grounds, a lawsuit asserting that President Trump’s business interests put him in violation of the U.S. Constitution’s foreign and domestic Emoluments Clauses. The opinion came down over a month ago, but I was traveling at the time and didn’t have a chance to read it until recently. There was plenty of informed commentary in the immediate wake of the decision (see, for example, here, here, here, and here), and I recognize that further discussion may not be that useful. But since I had posted several times about the case last year, I thought it might be worth saying a few words about what we might take away from the opinion and its impact.

For those whose memory of the details of the case is a bit fuzzy, a brief recap: The Foreign Emoluments Clause prohibits any official of the U.S. government from accepting any “present [or] emolument” from a foreign government, while the Domestic Emoluments Clause prohibits the U.S. President from receiving any “emolument” from the U.S. government or any state government during his or her term of office. The Citizens for Ethics and Responsibility in Washington (CREW) filed a lawsuit asserting that President Trump was in violation of both clauses. The complaint alleged that several of Trump’s businesses—from which he did not divest—solicited and received the patronage of foreign governments, in contravention of the Foreign Emoluments Clause, and that Trump companies had received business and/or benefits from both federal and state government entities, thereby offending the Domestic Emoluments Clause. The CREW suit, which was later joined by several co-plaintiffs who compete economically with Trump hotels and restaurants, asked the court to enjoin President Trump from continued or future violations of the Emoluments Clauses, and to order him to release his financial records in order to be sure that no such violations took place.

I’m sympathetic to CREW’s arguments on the merits (though I recognize that there are important arguments on the other side, which I admit I haven’t fully worked through – see here and here). But I feared that the lawsuit was likely to be dismissed—not on the merits, but on the grounds that the court lacked jurisdiction to hear the case. Indeed, I thought such a dismissal was almost certain. I also fretted that CREW’s decision to bring the case might be a serious strategic error: My worry was that the near-inevitable dismissal of the suit on jurisdictional grounds would give most of the public the misleading impression that the underlying claims of improper behavior were meritless, and that pro-Trump media outlets would foster that misimpression, with the net result that concern about Trump’s conflicts of interest would dissipate rather than intensify. My concerns somewhat but not fully abated when the additional plaintiffs (competing restaurants, hotels, and their employees) joined the suit. I thought that these additional plaintiffs, unlike CREW itself, were more likely to have “standing” (one of the requirements for the court to have jurisdiction), but that other jurisdictional problems might still stop the court from reaching and deciding the question whether President Trump is in violation of the Constitution.

So, now that the decision is out, what should we think of it, and what can we learn from it? My own reaction is, perhaps, a bit paradoxical: After reading the opinion and the subsequent commentary and news coverage, I’m even more convinced than I was before that this lawsuit and others like it will be dismissed on jurisdictional grounds, but I’m less concerned that pursuing these suits is a strategic mistake (though there are still questions about whether it’s a worthwhile use of scarce advocacy resources, or of the court system). Continue reading

New York State of Corruption: An Opportunity for Reform Amidst a Year of Reckoning

What do Joseph Percoco, George Maziarz, Edward Mangano, Sheldon Silver, Alain Kaloyeros, and Dean Skelos all have in common? Each of these New York public officials will go to trial on corruption charges over the next six months. The slew of trials kicks off today with the trial of Joseph Percoco, a former advisor to Governor Cuomo who is accused of taking over $300,000 from companies in a pay-to-play scheme for influence in the Cuomo administration. Next up, on February 5, George Maziarz goes to trial for filing false campaign expenditure reports in an attempt to conceal almost $100,000 in payments to a former Senate staff member who had quit amid sexual harassment allegations. March 12 brings the trial of Ed Mangano, the former Nassau County Executive charged with bribery, wire fraud, and extortion for receiving almost $500,000, free vacations, furniture, jewelry, home renovations, and other gifts as bribes and kickbacks. Sheldon Silver will be re-tried on April 16, after his conviction for obtaining nearly $4 million in bribes was vacated last year following the Supreme Court’s decision in McDonnell v. United States. In May, the former President of the SUNY Polytechnic Institute Alain Kaloyeros will stand trial for the same bribery scheme that ensnared Mr. Percoco. And finally, on June 18, Dean Skelos will be re-tried after his conviction on bribery charges was, like Mr. Silver’s, overturned in light of the Supreme Court’s McDonnell decision.

These six trials—all involving high-profile public officials, bribery and extortion charges, high stakes, and large sums of money—will receive considerable amounts of attention from the media and public, and will certainly provide much fodder for blogs like this one. While every month from January to June will bring a trial with its own drama and complexities, we can step back at the outset and consider what these trials collectively mean for corruption and ethics reform in New York. The trials will undeniably shake the public’s trust in public officials. Will these trials fuel cynicism that makes New Yorkers less likely to participate in the political process—or might these trials instead spark optimism that creates the political momentum for ethics reform?

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“Instead of Europeanizing Kosovo, We Have Balkanized EULEX”: The Need for Continued Localization in the EU’s Largest Mission

The European Union Rule of Law Mission in Kosovo (EULEX)—the EU’s largest, costliest, and most ambitious mission—has operated in Kosovo for almost a decade with the goal of assisting the country’s judicial authorities and law enforcement agencies in tackling organized crime, corruption, and other threats to the country’s stability. To date, the 800-person mission—which consists of police officers, prosecutors, judges, and has its own power of arrest and prosecution—has resulted in over 40,000 court judgments and the investigation of over 400 war crimes. Yet allegations of corruption have dogged the project. Three years ago, Maria Bamieh was dismissed from her position as a EULEX prosecutor when she alleged corruption within the Mission, including a €300,000 bribe accepted by a EULEX judge. While a subsequent investigation and report by Professor Jean-Paul Jacqué (on behalf of the EU) dismissed Ms. Bamieh’s specific allegations, the report recommended that EULEX be reformed to better deal with corruption—a problem that, the report noted, remained “omnipresent in Kosovo.” Allegations of corruption were re-ignited in late 2017, when EULEX’s Chief Judge, Malcolm Simmons, resigned after alleging “several cases of corruption at the heart of the mission.” The accusations and counter-accusations between Judge Simmons and EULEX are complicated, and it is not my objective here to try to evaluate their credibility. In brief, Judge Simmons’ most serious allegation is that senior EULEX officials pressured him to convict Deputy Prime Minister (and former Kosovo Liberation Army commander) Fatmir Limaj, in order to prevent Mr. Limaj from taking part in the Kosovan election. (Judge Simmons also leveled other accusations, including an improper romantic relationship between a judge and a Kosovan jurist, and that a fellow judge had hacked his email.) The Mission swiftly responded that Judge Simmons himself was “the subject of a series of independent investigations into serious allegations against him,” with an EU official acknowledging that Judge Simmons is subject to five investigations and “allegations that Simmons interfered in some of the most important verdicts” in recent years. While it remains to be seen which allegations (if any) are true, the situation appears to be lose-lose for the EULEX mission.

The current EULEX mandate expires on June 14, 2018. The controversy swirling around Judge Simmons’ resignation, coupled with the upcoming discussions as to whether to renew EULEX’s mandate, provides a timely opportunity to reassess a flaw that has plagued EULEX since its inception: an actual and perceived lack of trust and accountability between the mission and local Kosovan judicial and law enforcement authorities. If EULEX’s mandate is renewed this year, steps should be taken to address this problem.

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Assessing Corruption Assessments: TI’s National Integrity System

Paul Heywood and Elizabeth Johnson raise important questions in a recent journal article about Transparency International’s corruption assessment methodology; their article deserves close attention by consumers and producers of any type of corruption assessment.  The purpose of a corruption assessment is to determine where a country is falling short in the fight against corruption and what more it needs to do.  An assessment is the backbone of any national anticorruption policy, providing both a roadmap for reform and a gauge for measuring progress, and with a wrong map or inaccurate gauge, the chances the policy will curb corruption are slight.

TI calls its corruption assessment method the National Integrity System (NIS).  One of the more than 500 different corruption assessment methodologies (or “tools” in anticorruption jargon) now in use, it is among the oldest and most widely used.  Since 2001, it has been an input into anticorruption policy in over 100 countries.  Heywood and Johnson find it has four weaknesses  – Continue reading

Remembering Ferdinand Marcos’ History of Corruption is Relevant to the Philippines’ Present Anticorruption Efforts

Ferdinand Marcos, who ruled the Philippines as a dictator from 1972 to 1986, is remembered for the thousands of human rights violations he committed, as well as his massive corruption. Indeed, Marcos holds the dubious title of being the most corrupt Philippine president (a title for which there is unfortunately stiff competition), and has been identified in one study as the second most corrupt government leader in the world, as measured by the value of public assets he stole. The profligacy of Ferdinand Marcos and his wife Imelda—even at a time when the Philippines was spiraling into recession and a debt crisis—was shameless, and symbolized by Imelda’s 2,700 pairs of shoes and extravagant shopping sprees.

Given the magnitude of the corruption and abuses he perpetrated, one would think that Marcos’ place in Philippine history and in Filipinos’ collective memory is already well-settled. But alarmingly, a “revisionist” account of his presidency has recently gained, and continues to gain, wide currency. Many Filipinos are now beginning to consider the notion that Marcos may not really have been so bad—that his “sins” were merely overstated by the victors who wrote post-Marcos history. (Some of these issues are discussed here, here and here, but they are more frequently debated informally in mass and social media platforms.) These revisionist narratives spiked during the 2016 Philippine elections, when Marcos’ son, Ferdinand, Jr. (known as “Bongbong”), ran for, and almost won, the Vice Presidency. During his campaign, Bongbong denied his father’s legacy of corruption and framed his own platform as a revival of Marcos’ supposed “golden age” of peace and progress. Bongbong’s efforts to whitewash his father’s historical record to suit his electoral objectives gained traction, and has even spread to other fronts, like Wikipedia and Facebook. It did not help that President Rodrigo Duterte favorably endorsed the Martial Law declaration that paved the way for Marcos’ dictatorial rule in 1972 (calling it “very good”), and that the Supreme Court, in a recent controversial ruling, allowed the interment of Marcos’ remains in the Libingan ng mga Bayani (“Cemetery of Heroes”).

From a historical perspective, this phenomenon is disturbing in itself; but, if not arrested, this distortion of collective memory about Marcos’ history of corruption would also have dangerous implications for the Philippines’ ongoing and future anticorruption efforts. Continue reading

How to Crack Down on Cryptocurrencies

Bitcoin and other cryptocurrencies are electronic currencies that rely on a technological innovation called a “blockchain”—essentially, a complete transaction record, or “ledger,” stored across a network of computers rather than on a single site. Because of the transparency and alleged incorruptibility of the blockchain ledger, many anticorruption advocates have welcomed the possibility that blockchain technology might be an effective technology to combat corruption in a variety of ways, from ensuring transparency and accuracy in land records to helping to fight money laundering. Whether that optimism is justified remains to be seen. Unfortunately, the most popular application of blockchain to date—Bitcoin—is proving to be a major problem for the fight against corruption, money laundering, and a whole range of other black-market transactions.

Bitcoin is an unregulated currency and is fundamentally difficult to track. Bitcoin allows for the transmission of large amounts of money without the need to go through the traditional, and heavily regulated, financial service providers. Unlike cash, which is also difficult to trace, bitcoins are easy to hide, as the information necessary to stash hundreds of millions of dollars can be kept on a small USB thumb drive. And despite the vaunted transparency and incorruptibility of the Bitcoin “ledger,” which does indeed record all Bitcoin transactions, there is no easy way to establish the real-world identities of Bitcoin users. Nor is there any easy way to generate a record of individuals’ bitcoin holdings, which would have to be reconstructed from hundreds of thousands of transactions. Laundering money with bitcoins is further facilitated through the use “mixing” technologies that pool bitcoins and forward them onward to other accounts, thwarting the transparent blockchain.

Government efforts to address these problems have so far fallen short. China has begun to crack down on domestic Bitcoin exchanges, and some countries such as Bolivia have outright outlawed the use of Bitcoin. But these efforts have largely failed because the storage and exchange of bitcoins requires so little information; you can send bitcoins using protocols as simple as email or text message. Many governments have financial disclosure laws that require public officials to declare all their assets, including bitcoins. And sometimes officials do: three Ukrainian ministers recently disclosed, pursuant to Ukraine’s new asset declaration law, holdings of a combined US$45 million worth of bitcoins. But if corrupt government officials chose to violate the law by failing to disclose their Bitcoin holdings, it would be all too easy for them to do so without getting caught. Governments could also crack down on the services that make bitcoins easier to use—the digital exchanges and apps—but all this would likely do is cause the providers of those electronic services to shift their operations to other jurisdictions, as has happened with digital torrenting sites (which facilitate the pirating of digital content) after the US cracked down.

There is, however, an alternative regulatory strategy that holds more promise:  Continue reading

Do Mandatory Asset Declarations Reduce Corruption? And If So, How?

The United Nations Convention Against Corruption (UNCAC) calls on States Parties to adopt asset declaration and financial disclosure regimes for their public officials (see Article 8, paragraph 5 and Article 52, paragraph 5), and most states have complied with this commitment in one form or another. Indeed, according to a report by the Stolen Asset Recovery Initiative, there is a continuous upward trend in the number of states that have enacted financial disclosure laws (see Figure 1.1 at page 8). Yet the near-universal popularity of mandatory asset declarations does not mean that this tool is actually effective. True, there have been a few high-profile cases where asset declarations played an important role in anticorruption efforts, such as the impeachment of the Chief Justices of the Philippines and Sri Lanka, as well as the resignation of the Vice Rectors of a prestigious university in Thailand and the top brass of a state bank in Portugal. But such high-profile cases are rare and may not be representative of the larger picture. In a previous post on this blog, Rick Messick expressed some skepticism about the extent to which asset declarations and other forms of mandatory financial disclosures actually contribute to anticorruption efforts, and criticized what he saw as extravagant and unrealistic claims about the effectiveness of such disclosures as anticorruption tools.

So what does the existing research actually say about the effectiveness of asset declarations on anticorruption efforts? While there are only a few studies on this topic, the evidence they supply nevertheless offers valuable insights.

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Lessons from the “Isolated Capital” Effect for the Fight Against Public Corruption

As numerous commentators have written on this blog and elsewhere, the New York state legislature suffers from a serious corruption problem (see, for example, here and here), with six corruption convictions of government leaders in eleven years, and suspicions that the rot runs much deeper. Would things be any better if New York’s capital were in New York City rather than in Albany? While it’s impossible to say for sure, research suggests—perhaps surprisingly—that the answer might be yes. In an influential paper, Filipe Campante and Qhoc-Anh Do found that, on average, corruption (as measured by federal corruption-related crime convictions per capita) is higher in states where the state capital is more “isolated”—that is, farther from the state’s major population centers. (States with relatively isolated capitals include not just New York (Albany), but also Illinois (Springfield), South Carolina (Columbia), Nevada (Carson City), and Florida (Tallahassee), among others.)

Of course, states are very unlikely to relocate their capitals, but understanding the likely mechanisms that explain Campante and Do’s surprising finding may help us better understand the sorts of policy levers that might help reduce corruption in state government. So why might it be the case that states with more isolated capital cities might have more corruption? Continue reading